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As filed with the Securities and Exchange Commission on September 27, 2021.

Registration No. 333-259361

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT NO. 1

TO

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

TDCX Inc.

(Exact name of Registrant as specified in its charter)

 

 

 

Cayman Islands   7373   Not Applicable
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer Identification Number)

750D Chai Chee Road,

#06-01/06 ESR BizPark @ Chai Chee

Singapore 469004

(65) 6309 1688

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Cogency Global Inc.

122 East 42nd Street, 18th Floor

New York, NY 10168

(800) 221-0102

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

 

Copies to:

Rajeev P. Duggal, Esq.

Skadden, Arps, Slate, Meagher & Flom LLP

6 Battery Road

Suite 23-02

Singapore 049909

(65) 6434-2900

 

Sharon Lau, Esq.

Latham & Watkins LLP

9 Raffles Place

#42-02 Republic Plaza

Singapore 048619

(65) 6536-1161

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company  ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.   ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

 

CALCULATION OF REGISTRATION FEE

 

 

   
Title of Each Class of
Securities to be Registered(1)(2)
 

Amount to be

Registered(2)(3)

 

Proposed

Maximum

Offering Price

per Share(3)

 

Proposed

Maximum

Aggregate

Offering Price(2)(3)

  Amount of
Registration Fee(4)
Class A ordinary shares, par value US$0.0001 per share  

21,587,800

  US$18.00   US$388,580,400   US$42,395

 

 

(1)

American depositary shares issuable upon deposit of ordinary shares registered hereby will be registered under a separate registration statement on Form F-6 (Registration No. 333-259802). Each American depositary share represents one Class A ordinary share.

(2)

Includes (a) Class A ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of the distribution or within 40 days after the later of the effective date of this registration statement and the date the securities are first bona fide offered to the public, and (b) additional Class A ordinary shares that are issuable upon the exercise of the underwriters’ option to purchase additional shares to cover over-allotments, if any.

(3)

Estimated solely for the purposes of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(4)

Previously paid.

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission acting pursuant to said Section 8(a) may determine.

 

 

 


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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS (Subject to Completion)

Dated September 27, 2021

 

LOGO

TDCX Inc.

18,772,000 American Depositary Shares

Representing 18,772,000 Class A Ordinary Shares

 

 

This is the initial public offering of TDCX Inc. We are offering 18,772,000 American Depositary Shares, or ADSs.

Prior to this offering, there has been no public market for our ADSs or ordinary shares. Each ADS represents one of our Class A ordinary share, par value US$0.0001 per ordinary share, and the ADSs may be evidenced by American Depositary Receipts, or ADRs. It is currently estimated that the initial public offering price per ADS will be between US$16.00 and US$18.00. Application has been made for the listing of our ADSs on the New York Stock Exchange under the symbol “TDCX.”

We are a “controlled company” under the corporate governance rules of the New York Stock Exchange.

We are an “emerging growth company” under the U.S. federal securities laws and have elected to comply with certain reduced public reporting requirements.

 

 

Investing in our ADSs involves risks. See “Risk Factors” beginning on page 22.

 

 

 

     Per ADS      Total  

Public offering price

   US$                    US$                

Underwriting discount and commission(1)

   US$                    US$                

Proceeds, before expenses, to TDCX Inc.

   US$                    US$                

 

(1)

See “Underwriting—Conflict of Interest” for a description of compensation and other items of value payable to the underwriters. We have granted the underwriters the right to purchase up to an additional 2,815,800 ADSs to cover over-allotments within 30 days after the date of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission or any other regulator has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Immediately prior to the completion of this offering, our issued and outstanding share capital will be re-designated into Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to ten votes per share. Holders of Class A ordinary shares and Class B ordinary shares will vote together as one class on all matters that require a shareholders’ vote. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstance. Upon the completion of this offering, assuming the underwriters do not exercise their over-allotment option to purchase additional ADSs, Mr. Laurent Junique, our Founder, Executive Chairman and Chief Executive Officer, will beneficially own an aggregate of 123,500,000 Class B ordinary shares, which will represent 86.8% of the then total issued and outstanding ordinary shares and 98.5% of total voting power of our issued and outstanding shares (assuming the underwriters do not exercise their over-allotment option).

Certain affiliates and other persons and entities associated with our Founder and certain of our directors and officers have indicated interests in purchasing an aggregate amount not to exceed 2% of the ADSs being offered in this offering at the initial public offering price and on the same terms as the other ADSs being offered. Such indications of interests are not binding agreements or obligations to purchase, and we and the underwriters are under no obligations to sell any ADSs to such persons.

The underwriters expect to deliver the ADSs against payment to purchasers on or about             , 2021.

 

 

 

Goldman Sachs

 

Credit Suisse

            , 2021


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LOGO


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LOGO


Table of Contents

TABLE OF CONTENTS

 

     Page  

Letter From Mr.  Laurent Junique, Our Founder, Executive Chairman and Chief Executive Officer

     1  

Prospectus Summary

     4  

Risk Factors

     22  

Special Note Regarding Forward-Looking Statements

     60  

Enforceability of Civil Liabilities

     62  

Use of Proceeds

     65  

Capitalization

     66  

Dividends and Dividend Policy

     68  

Dilution

     70  

Selected Consolidated Financial and Other Data

     72  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

     77  

History and Corporate Structure

     107  
     Page  

Industry Overview

     109  

Business

     132  

Regulatory Environment

     161  

Management

     169  

Principal Shareholder

     177  

Related Party Transactions

     179  

Description of Certain Indebtedness

     182  

Description Of Share Capital

     186  

Certain Cayman Islands Company Considerations

     193  

Description of American Depositary Shares

     199  

Shares Eligible For Future Sale

     216  

Expenses Related to This Offering

     218  

Material Tax Considerations

     219  

Underwriting—Conflict of Interest

     224  

Legal Matters

     230  

Experts

     230  

Where You Can Find More Information

     230  

Index of Consolidated Financial Statements

     F-3  
 

 

 

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. We are offering to sell ADSs and seeking offers to buy ADSs, only in jurisdictions where offers and sales are permitted. Unless otherwise noted, the information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of the ADSs.

We have not taken any action to permit a public offering of the ADSs outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of the ADSs and the distribution of this prospectus outside of the United States.

Until and including             , 2021 (the 25th day after the date of this prospectus), all dealers that buy, sell or trade ADSs, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Market, Industry and Other Data

This prospectus includes estimates regarding market and industry data and forecasts, which are based on publicly available information, industry publications and surveys, reports from government agencies, reports by market research firms or other independent sources and our own estimates based on our management’s knowledge of and experience in the market sectors in which we compete. Certain information in this prospectus is based on a report on the outsourced business support services industry prepared by Frost & Sullivan Limited, or Frost & Sullivan, which was commissioned by us.

 

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Trademarks and Intellectual Property

We own or otherwise have rights to the service mark “TDCX” mentioned in this prospectus that we use in conjunction with the marketing and sale of our services. This service mark is the property of TDCX Holdings Pte. Ltd. and it will eventually be licensed for use by us and our subsidiaries. This prospectus also mentions and cites trademarks, service marks, copyrights and trade names of other companies, which are the property of their respective owners. We do not intend our use or display of other companies’ trademarks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by any other companies. Solely for convenience, our trademark and trade name referred to in this prospectus may appear without the ® roundel or TM symbol, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to those trademarks and trade names.

Conventions that Apply to this Prospectus

Unless the context provides otherwise, for the purposes of this prospectus:

 

   

“ADR” means American Depositary Receipt;

 

   

“ADS” means American Depositary Shares;

 

   

“agent” means an FTE, as classified under our employee classification system;

 

   

“AI” means artificial intelligence;

 

   

“B2B” means business-to-business;

 

   

“B2C” means business-to-consumer;

 

   

“Class A ordinary share” means our Class A ordinary shares of par value US$0.0001 per share;

 

   

“Class B ordinary share” means our Class B ordinary shares of par value US$0.0001 per share;

 

   

“clients” means our corporate clients with whom we have entered into contractual arrangements;

 

   

“CRM” means customer relationship management;

 

   

“customers” means the parties with whom we have customer interactions on behalf of our clients;

 

   

“CX” means customer experience;

 

   

“Founder” means Mr. Laurent Junique, our founder, Executive Chairman and Chief Executive Officer;

 

   

“FTE” means full-time equivalent employee;

 

   

“KPI” means key performance indicator;

 

   

“MSA” means master services agreement;

 

   

“new economy” means high growth industries that are on the cutting edge of digital technology and are the driving forces of economic growth;

 

   

“NYSE” means the New York Stock Exchange;

 

   

“Principal Shareholder” means Transformative Investments Pte Ltd;

 

   

“SOW” means statements of work;

 

   

“TDCX HPL” means TDCX Holdings Pte. Ltd. (formerly Agorae Pte Ltd);

 

   

“TDCX KY” means TDCX (KY) PTE LTD;

 

   

“TDCX SG” means TDCX (SG) Pte. Ltd. (formerly Teledirect Pte Ltd);

 

   

“U.S.” and “United States” means the United States of America; and

 

   

“We,” “us,” “our”, “our Company” and “TDCX” mean TDCX Inc. and its subsidiaries and associated companies, collectively.

 

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Certain metrics presented in this prospectus, which include the annual voluntary attrition rate of our employees and our employee satisfaction scores, are calculated using internal company data. While we believe these metrics to be reasonable estimates for the applicable period of measurement, collected through our internal employee surveys and human resources management systems, there are inherent challenges in measuring employee satisfaction and similar metrics. In addition, we are continually seeking to improve the estimation and evaluation criteria that we use to calculate our annual voluntary attrition rate and employee satisfaction, and such estimates may change due to improvements or changes in our methodology. References to the average number of agents and average number of employees are an average of headcount at end of each month over the course of the given period.

We regularly review our processes for calculating these metrics, and from time to time we may discover inaccuracies in our metrics or make adjustments to improve their accuracy, including adjustments that may result in the recalculation of our historical metrics. In addition, our estimates may not be comparable to estimates of similar metrics published by third parties, such as research analysts, due to differences in methodology.

Basis of Presentation

TDCX was incorporated in the Cayman Island on April 16, 2020 and is wholly-owned by Transformative Investments Pte Ltd. The entire interest of Transformative Investments Pte Ltd is held by a trust that was established for the benefit of its founder (the “Founder”) and his family. TDCX was incorporated to acquire our Founder’s shareholder’s interest in TDCX KY. On December 22, 2020, TDCX KY acquired our Founder’s 100% interest in TDCX HPL. Prior to September 2018, TDCX SG, was 60% owned by our Founder and 40% owned by a third party. In September 2018, the remaining 40% of TDCX SG was acquired by TDCX HPL by paying cash in an amount of S$38 million. In January 2019, our Founder reduced his 60% equity interest in TDCX SG through cancellation of his shares in TDCX SG, and TDCX SG became a wholly owned subsidiary of TDCX HPL. On March 23, 2021, TDCX acquired 100% of TDCX KY from our Founder. As TDCX, TDCX KY, TDCX HPL and TDCX SG were under common control of the Founder during all the periods presented, the acquisitions of TDCX SG and TDCX HPL by TDCX KY as well as the acquisition of TDCX KY by TDCX were accounted for in a manner similar to a pooling of interest with assets and liabilities all reflected at their historical amounts in our consolidated financial statements as if the reorganization had always been in place. As such, the consolidated financial statements were prepared as if TDCX had control over TDCX KY, TDCX HPL and TDCX SG for all periods presented. For more information, see Note 1 to our audited consolidated financial statements included elsewhere in this prospectus.

When we refer to “U.S. dollars” and “US$” in this prospectus, we are referring to United States dollars, the legal currency of the United States. When we refer to “S$”, we are referring to Singapore dollars, the legal currency of Singapore. When we refer to “IFRS”, we are referring to International Financial Reporting standards, or IFRS, as issued by the International Accounting Standards Board, or IASB.

Unless otherwise noted, all translations from Singapore dollars to U.S. dollars and from U.S. dollars to Singapore dollars in this prospectus were made at a rate of S$1.344 to US$1.00, being the rate in effect as of June 30, 2021. We make no representation that any Singapore dollar or U.S. dollar amount could have been, or could be, converted into U.S. dollars or Singapore dollar, as the case may be, at any particular rate, the rates stated below, or at all. On September 6, 2021, the rate was S$1.342 to US$1.00.

Certain amounts, percentages and other figures included in this prospectus have been subject to rounding adjustments. Accordingly, amounts, percentages and other figures shown as totals in certain tables or charts may not be the arithmetic aggregation of those that precede them, and amounts and figures expressed as percentages in the text may not total 100% or, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

 

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LETTER FROM MR. LAURENT JUNIQUE, OUR FOUNDER, EXECUTIVE CHAIRMAN AND CHIEF EXECUTIVE OFFICER

I founded TDCX in 1995 with a vision of a better way to deliver customer experience services. The flagship office in Singapore had its roots as a compact space with two staff. Those early days taught me that a team of tight-knit, talented and dedicated employees that can tackle the most complex challenges would set us apart. This formula of quality people and enterprising work culture drives everything we do.

The sun does not set on TDCX. I attribute our success to our ability to anticipate seismic shifts in the customer experience market and our agility to respond to our clients’ changing needs.

Today, TDCX has a presence in 10 geographies around the world and I believe a spectacular management team who drives our business day and night, ensuring that we keep the customers that have been entrusted to us satisfied. I would like to thank my management team for embarking on this journey with me.

TDCX and the Digital Economy in Asia and Beyond – A Symbiotic Partnership

The 2008 global recession provided an important lesson. We saw a significant growth in the number of digital companies, including many of the fastest-growing companies, arriving in Asia to capitalize on the region’s dynamic recovery. Those were the fledgling days of the smartphone and e-commerce industries.

These companies, many of which quickly established themselves as new economy brands, rapidly attracted customers in Asia, by tailoring their products and offerings for the region. However, they did not have the local market knowledge or resources needed to support their growth. This is where TDCX came in with our customer experience services as we aimed to complete the picture.

We believe that we brought our deep understanding of what customers want, complex problem-solving skills and technology solutions to offer them customized customer experience solutions. As a result, these growing businesses in the new world of the digital economy became our clients. Our lean, agile and technology-enabled business model, coupled with our strong employer brand, enabled us to attract the talent required to scale quickly and keep pace with our clients’ growth.

A client once told me: “In a fast-moving economy, we need a fast-moving and innovative partner.” That’s TDCX! I believe that we are widely recognized as a high-growth, digital complex customer experience solutions provider for technology and blue-chip companies in Asia that even our competitors publicly talk about.

The Future Beckons

TDCX is a specialist partner to fast-growing new economy companies that are redefining digital advertising, e-commerce, online travel and hospitality, consumer electronics, fintech and other technology-enabled sectors in Asia.

We believe that our clients trust us with their most pressing customer interactions. We are now approximately 13,000 strong, handling complex assignments in more than 20 languages daily. These cut across digital advertising, online bookings, troubleshooting customer issues and moderating content, as we strive to keep the Internet a safe environment for the next generation.

As we live more and more of our lives online, we expect to be able to get things done simply, conveniently and on-demand. This transformational shift has upended traditional interaction between brands and their customers, and propelled customer expectations to a new level.

Today, while technology, such as artificial intelligence, is leveraged to resolve straightforward enquiries swiftly, customer needs continue to evolve. Their questions are becoming more complex and sophisticated, while their

 

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expectations for speed and accuracy in problem solving are also likewise increasing. Faced with such customer demands, the experience customers have with a brand, particularly in their times of need, will be the key to building their loyalty.

As such, we envision a future where highly capable specialists, equipped with the tools to work from home or at workspaces, solve increasingly complex problems for new economy brands. These companies, which are experiencing unprecedented growth and fierce competition, require agile, flexible and effective customer experience capabilities in order to stand out from the pack.

According to Frost and Sullivan, the global customer experience market is expected to grow from US$80 billion in 2020 to US$100 billion in 2025. In Southeast Asia alone, the customer experience market for the new economy sector is expected to grow at 19 per cent CAGR between 2016 and 2025.

As TDCX’s innovative new economy clients develop their next “game-changing” products, services or applications, we aspire to be there to serve their customers with our suite of innovative customer experience solutions.

TDCX Strives to Win

Our greatest advantage is our people. We hire and develop the right people, provide them with attractive work locations and equip them with technology to carry out their tasks to the best of their abilities.

Our proprietary technology platform provides the multiplier effect to extract the best from our team. It starts with “Flash Hire,” our customizable, automated video-based recruitment platform that learns about the characteristics of our best performers and applies those insights in our recruitment process. We believe that this improves our ability to hire the right people, while significantly reducing our recruitment time and costs.

We develop our talent through “Flash Coach” and “Flash Learn,” where we roll out online learning and training programs. To determine our developmental priorities, we draw insights from our data as we aim to approach this clearly and systematically.

In addition, we use advanced analytics, artificial intelligence and a real-time decision support system to understand our employees’ performance. This helps us to make rapid operational changes and to take pre-emptive steps such as additional training and resources so as to achieve better client outcomes.

We strive to create workspaces that are welcoming, productive and inspiring. The office environment is our employees’ home-away-from-home, where they hike the extra mile.

During the COVID-19 pandemic, our resilience and agility were tested. Employee safety was our top priority and everyone at TDCX banded together to address the challenge. Through our technological capabilities, we were able to transition our people to a work-from-home arrangement quickly and seamlessly while maintaining the security, efficiency and ease that we offer in our offices. As a result, we were able to ensure the safety of our employees without compromising on our service standards.

These factors, in combination, lead to us having employee satisfaction scores that are consistently high. As such, we are able to expand at scale quickly and efficiently to meet the demands of our global clients, while maintaining the collaborative, people-focused culture that is at the heart of TDCX. We believe that our expertise in the art and science of employee recruitment and talent development leads to us having a team of motivated, high-performing people who bond with TDCX.

Caring for the Community and our Environment

Corporate Social Responsibility (“CSR”) is deeply rooted in TDCX’s culture. We are committed to driving initiatives that help to empower our people, uplift local communities and promote environmental sustainability.

 

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In the second quarter of 2021, we conducted 39 CSR activities, contributed 241 volunteer hours, and raised more than US$11,000 to benefit more than 14,500 beneficiaries.

One of those efforts is our ongoing support for frontline medical teams as we battle the COVID-19 pandemic. We supported medical teams through the 4F, or Friday Food for Frontliners Programme, which is a global initiative that provides meals to such frontline workers. Our most recent efforts were in support of frontline medical teams in Colombia and the Philippines, where hundreds of meals were donated to hospitals.

Given the far-reaching impact of climate change, we have made it a priority to reduce our carbon footprint across our operations globally. To date, we have offset 38,770 tonnes of carbon dioxide, which is the equivalent of a reduction in carbon emissions from more than 8,400 passenger vehicles over one year.

Our Eyes are Set Firmly on the Future

Our revenues have increased by 140% from 2018 to 2020, and we opened new offices in six geographies during that time. As of June 30, 2021, we had 13,308 employees.

As we step forward as a global public company, our focus remains on our people, our culture and our growth. We remain steadfast in our long-term vision and our disciplined decision-making for the benefit of our clients, employees and shareholders.

We aim to achieve growth by:

 

  1.

Expanding our network: We believe that we have first mover advantage in Southeast Asia with a unique footprint. Our established positions in key markets allow us to onboard new clients that expand our fast-growing network and provide a strong platform for our geographic reach. We plan to continue to carefully expand our global footprint without losing sight of where our center of gravity is: Asia!

 

  2.

Investing in people and technology: Our commitment to attracting the best talent to join us on this exciting journey will remain an important tenet in our strategy. This is expected to be catalyzed by our new status as a public company, which we believe will enhance our employee value proposition. We also expect to continue to create new digital tools and solutions through our dedicated digital innovation team, Digital Lab, to drive the insights and efficiencies that our clients are reputed for.

We believe that our proven business model, coupled with our team of talented individuals, put us in a strong position to capitalize on future growth opportunities. We look forward to scaling new heights with you, our new investors.

Laurent Junique

Founder, Executive Chairman and Chief Executive Officer

 

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PROSPECTUS SUMMARY

The following is a summary of material information discussed in this prospectus. This summary may not contain all the details concerning our business, our ADSs or other information that may be important to you. You should carefully review this entire prospectus, including the “Risk Factors” section and our financial statements and the related notes included elsewhere in this prospectus, before making an investment decision.

Overview

We are a high-growth digital customer experience solutions provider for innovative technology and other blue-chip companies. We offer omnichannel CX solutions, sales and digital marketing services and content monitoring and moderation services. We have specific expertise in providing tailored digital customer experience solutions to manage complex customer interactions that go beyond providing boilerplate responses and which require a highly trained workforce capable of effectively delivering our differentiated services and solutions to our clients and their customers. Our focus on complex digital solutions enables us to provide higher value services and solutions for our clients. Our strategy has resulted in a highly attractive financial profile. We have experienced robust growth. From the year ended December 31, 2018 to the year ended December 31, 2020, our revenue, profit for the year and EBITDA have grown at a CAGR of 54.9%, 50.3% and 60.7%, respectively. In the years ended December 31, 2018, 2019 and 2020, we recorded revenue of S$181.2 million, S$330.3 million and S$434.7 million (US$323.3 million), profit for the year of S$38.1 million, S$73.5 million and S$86.1 million (US$64.0 million) and EBITDA of S$55.4 million, S$108.1 million and S$142.9 million (US$106.0 million), respectively. For the same periods, we recorded net profit margins of 21.0%, 22.2% and 19.8%, respectively, and EBITDA margins of 30.6%, 32.7% and 32.9%, respectively. In the six months ended June 30, 2020 and 2021, we recorded revenue of S$209.3 million and S$251.6 million (US$187.2 million), profit for the period of S$38.5 million and S$44.8 million (US$33.3 million) and EBITDA of S$65.2 million and S$78.2 million (US$58.2 million), respectively. For the same six month periods, we recorded net profit margins of 18.4% and 17.8%, respectively, and EBITDA margins of 31.1% and 31.1%, respectively.

We believe our employees and our distinctive corporate culture are key enablers of our success, a core strength and part of our competitive advantage. Our corporate culture is designed to foster a work environment that attracts, develops and retains a highly skilled workforce that can effectively engage in complex customer interactions. We focus on reinforcing a culture that emphasizes a sustainable and collaborative approach while being fully committed to our clients’ requirements. We strive to ensure that our distinctive culture is incorporated within all the relationships and processes of our organization and fits within our values and goals.

We have an international footprint. As of the date of this prospectus, we service our clients’ customers globally in more than 20 languages. This international footprint is supported by 13,308 employees as of June 30, 2021, who are located in offices in ten geographies: Singapore, the Philippines, Malaysia, Thailand, China, Japan, Spain, India, Colombia and Romania.

Our business comprises three key service offerings: (1) omnichannel CX solutions; (2) sales and digital marketing services; and (3) content monitoring and moderation services. We also offer services consisting of miscellaneous activities, such as providing workspaces to existing clients and providing human resource and administration services to clients. We help our clients manage relationships with their customers by providing digital customer experience solutions, such as after-sales service and customer support across ten industry verticals, including travel and hospitality, digital advertising and media and fast-moving consumer goods. Our sales and digital marketing services offering helps our clients market their products and services to potential customers in both the business-to-consumer, or B2C, and the business-to-business, or B2B, markets. Our content


 

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monitoring and moderation services offering helps our clients create a safe and secure online environment for social media platforms by providing a human touch to content monitoring and moderation services.

Our competitive strengths

Digital customer experience solutions provider for high-growth technology disruptors

We provide a high value-added service platform to market-leading clients in the new economy sectors and traditional blue-chip clients who are undergoing digital transformation across their organizations. Frost & Sullivan defines the “new economy” as the high growth industries that are on the cutting edge of digital technology and are the driving forces of economic growth. These industries are seen as an evolution of the existing traditional economy aided by technological advancements and innovation. Our services provide synergies with our clients’ digital economy value chains and enable our clients to grow and transform their businesses’ consumer experience. We offer customized and differentiated customer contact solutions and possess the ability to handle complex and mission-critical digital customer experience interactions. These offerings are enhanced by our ability to solve problems for our clients by leveraging customer interaction data analytics to allow our clients to access real-time data which gives them valuable insights on their end-customers, allows them to improve business processes and make more prompt business decisions to resolve problems in a more timely manner.

We have leveraged our integrated omnichannel and multimodal solutions to shape user experiences in a world of evolving and proliferating digital communication and technology platforms from traditional channels, such as voice and email, to advanced technology driven channels, ranging from messaging and social media to AI-powered chat bots and in-app interactions. We are also able to synergize our in-house developed technology with third-party technology and platforms to solve operational issues which our clients are facing.

We have an international footprint with offices in ten geographies across Asia, Europe and Latin America, which provides us with access to a broad talent pool and equips us with multilingual capabilities to serve a global customer base, including English and key Asian languages, such as Mandarin, Thai, Korean, Malay (Malaysia and Indonesia), Vietnamese and Japanese.

Strong focus on human capital development to deliver superior customer experiences

We believe the quality of our employees is a key differentiator in winning and retaining business, as well as in delivering a superior customer experience. Through our structured recruitment process and strong emphasis on career development, we strive to attract, develop and retain the industry’s high caliber talent who possess deep knowledge of local customs and cultural sensitivities. As of June 30, 2021, we had 13,308 employees of which more than 60% are college or university graduates, including employees with master’s degrees and/or doctorates, which helps us handle complex campaigns. Our employees have access to ongoing internally and externally developed supplementary training and certifications in a number of areas, such as COPC, a standard certification, which is a widely recognized standard across the customer experience industry.

In the years ended December 31, 2018, 2019 and 2020, our annual voluntary attrition rate, measured by the number of employees that voluntarily left us in a period divided by the average number of employees in such period, was 21.5%, 23.1% and 24.8%, respectively, compared to the industry average of 30% to 34% in the Asia Pacific region, according to Frost & Sullivan. Consistent with our relatively low attrition rates, employee satisfaction surveys have demonstrated a high degree of satisfaction. Our company-wide employee satisfaction scores were at 87%, 91%, 87% and 89% in our annual internal employee engagement surveys in 2018, 2019 and 2020, including most recently in July 2021. We believe that our strong focus on human capital has been critical to our ability to minimize business disruptions and rehiring and training costs, resulting in high service quality for our clients.


 

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Our commitment to the development of our people is reflected in the multiple awards we have received, including the Best Companies to Work for In Asia 2020 (both our Thailand and Philippines office), the Top 100 Asia’s Best Employer Brands 2019 from Employer Branding Awards (our Malaysia office) from the HR Asia Awards, the Great Place to Learn Certification from the Great Place to Work Institute & SkillsFuture Singapore in 2019 and 2020 (our Singapore office), and Asia’s Best Employer Brand Award from the World HRD Congress in 2018 (our Singapore office).

Well-positioned to capitalize on positive “digital economy” trends and increasing demand for our services

We believe favorable underlying industry trends continue to fuel the growth of our clients. According to Frost & Sullivan, there are a plethora of internet-based technology offshoots driving the new economy growth, including companies in the e-commerce, digital advertising, fintech, online gaming and sharing economy industries. Driven by fundamental shifts in consumer behavior and increased adoption of internet and mobile usage, the global market sizes of retail e-commerce sales, digital advertising spend, sharing economy and online gaming (by transaction value) are estimated to grow at CAGRs of 14.5%, 15.3%, 18.2% and 9.3% from 2021 through 2025, respectively, as reported by Frost & Sullivan.

We believe our clients view their relationship with us as strategically important. New economy clients increasingly seek customized solutions in an evolving digital business services market that is increasingly becoming more complex. We believe the trend will continue as new economy clients rely on us to perform omnichannel CX solutions so that they can maintain their employee-lite, nimble business models, while we provide a service framework that can scale along with their growth. Furthermore, given their relative lack of physical touchpoints with their end-users, new economy clients tend to place a greater emphasis on the quality of customer experience service providers, where we believe we are strongly positioned. Our digital hiring platform, Flash Hire, enables us to remain agile and keep up with the growth of our high-growth clients by allowing us to rapidly identify, evaluate and hire candidates as needed.

Attractive client base of some of the largest and most disruptive companies in fast-growing industries and markets along with traditional blue-chip companies which are undergoing digital transformations

Our client base consists of some of the leading names in their respective industries, such as Facebook and Airbnb, other fast-growing, new economy companies for which we can scale up projects as they grow, as well as traditional blue-chip companies that rely on us to partner in their digital transformation journey. In the past few years, we have proactively increased our new economy client base, which provides strong growth opportunities for us. As of June 30, 2021, 92.7% of our agents, which are the customer facing employees that work on our campaigns, were staffed on campaigns for new economy clients.

We seek to forge partnerships and create long-term relationships with our clients, where they view us as an integral part of their organization through the solutions we offer. By growing and partnering with them over the long term, we have expanded the scope of our services and solutions and have become seamlessly integrated into our clients’ operations, while helping them deliver on their brand promise. On a combined basis, Facebook and Airbnb accounted for a total of 52.0%, 65.9%, 60.4%, 62.3% and 62.3% of our revenue for the years ended December 31, 2018, 2019 and 2020, and the six months ended June 30, 2020 and 2021, respectively. From January 1, 2018 to June 30, 2021, we have acquired 32 new clients. Our new clients are high-growth, new economy disruptors and traditional blue-chip companies engaged in businesses across multiple jurisdictions. For example, since 2018, we have grown relationships with a global payments platform provider, a leading social network, a leading consumer electronics company, a leading regional e-commerce platform and a leading video game developer.


 

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Track record of high-growth financial performance

We focus on providing our clients with a differentiated level of service, which we believe enables us to grow our business together with the growth of our clients’ businesses as well as grow our share of our client’s budget. Due to a combination of an increase in the amount of work for existing clients as well as attracting work from new clients, we increased the average number of our agents by 118% from 3,701 for 2018 to 8,070 for 2020. During this period, we have experienced robust growth. From the year ended December 31, 2018 to the year ended December 31, 2020, our revenue, profit for the year and EBITDA have grown at a CAGR of 54.9%, 50.3% and 60.7%, respectively.

Our ability to provide a differentiated level of service and higher valued and more sophisticated services, while efficiently increasing the scale of our business has resulted in our net profit margin of 21.0%, 22.2%, 19.8%, 18.4% and 17.8% for the years ended December 31, 2018, 2019 and 2020, and the six months ended June 30, 2020 and 2021, respectively. It also resulted in our EBITDA margin of 30.6%, 32.7%, 32.9%, 31.1% and 31.1% for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, respectively. Our EBITDA margin for 2020 is the highest among CX-centric outsourced service providers, according to Frost & Sullivan.

We have also managed our growth while maintaining a low debt profile. As of December 31, 2018, 2019 and 2020, we had a total debt to EBITDA ratio of 0.6, 0.3 and 0.3, respectively. We also intend to use a portion of the proceeds from our offering to repay the Credit Suisse Facility, which represents a significant portion of our debt that is outstanding as of the date of this prospectus. Our strong balance sheet, combined with our ability to grow our business and generate cash flows, gives us a strong foundation for focused investments and further business expansion.

Dynamic and highly experienced management team

We have an experienced, hands-on and savvy management team who combine global expertise with local insights. Our Founder, Executive Chairman and Chief Executive Officer, Mr. Laurent Junique, has over 25 years of industry experience and has won numerous awards, including the “Ernst & Young Entrepreneur of the Year in the Outsourced Solutions category” for Singapore in 2018. Our management team has an average of over 15 years of relevant industry experience and most of our senior management have worked with us for over five years, which has allowed us to accumulate valuable operational experience and deep vertical expertise, while building and maintaining close relationships with our key clients. Our management team has been a champion in promoting a vibrant and distinctive culture that emphasizes teamwork, a high degree of flexibility, dedication to the client and alignment with client goals. Under the leadership of our management, we have been able to grow our Company from 1,400 employees as of December 31, 2012, the year we commenced servicing new economy clients, to 13,308 employees as of June 30, 2021.

Our growth strategy

Leverage network effects to expand client coverage and service offerings globally

Our growth strategy is to create a significant network in each of our markets so that we can gain local insights, on-the-ground capabilities and operational experience to expand our client coverage and digital offerings. We intend to achieve this through (i) deepening our relationships with our existing clients, (ii) growing our client base and (iii) extending and “future-proofing” our omnichannel capabilities. We expect the learning and insights from each client will enable us to deepen our expertise in key verticals and further expand our capabilities across service offerings, industries and regions, thereby creating network effects. As we scale and grow our expertise, we expect to penetrate more markets as the impact from our network effects increase.


 

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Deepening our relationships with our existing clients

Our relationships with our new economy clients offer significant opportunities for growth. As we demonstrate the value that we provide, we are frequently able to expand the scale and scope of our services in a variety of ways and grow our wallet share. With our new economy clients’ strong business model scalability, we are well-positioned to ride their growth. We also find opportunities to cross-sell different types of digital offerings and use data analytics to provide integrated insight-driven strategies to help clients improve their business outcomes. In the past, clients who have engaged us for our services have been willing to turn over additional and more critical processes to us as we demonstrate our capabilities over time. As we become more intricately knowledgeable of our clients’ businesses and processes, we find opportunities to expand across the value chain and provide new and increasingly complex digital offerings to them via multiple channels to improve their processes. This in turn encourages client “stickiness” and is a factor that discourages our clients from turning to other providers.

Growing our client base

We seek to develop long-term client relationships with new clients, especially with clients who (i) require similarly complex services as our existing clients, (ii) provide opportunities for us to deliver a wider range of capabilities and meaningful impact to their businesses, and (iii) facilitate robust pipeline development and a strong win-rate of new top-tier clients. We use a multifaceted, technology driven strategy to attract new economy clients.

Extending and “future-proofing” our omnichannel capabilities

We seek to improve our capabilities through continued investments in digital technology and use of third-party technology. We strive to grow our capabilities in future technologies and channels and to continuously evolve with new technology offerings, such as Internet of Things, or IoT, products, wearables and apps, among other areas.

Enhance our human capital and reinforce our distinct corporate culture

Our people are critical to our success. Our ability to grow will depend on our ability to continue to attract, train, and retain large numbers of talented individuals. We continue to focus on maintaining a work environment that would make TDCX an “employer of choice.” We intend to achieve this through various initiatives, including:

 

   

working with new economy digital disruptor clients that are the companies of the future;

 

   

utilizing innovative recruiting techniques that will appeal to potential employees including young talent;

 

   

providing training and development throughout the tenure of an employee’s career, such that our employees remain educated and agile to meet our clients’ evolving requirements;

 

   

providing compensation with appropriate incentives that rewards employee commitment, resulting in high standards of customer experience and support for our clients;

 

   

supporting our employees in work from home situations with the technology ecosystem that enables them to remain productive and connected to training opportunities;

 

   

fostering a healthy work environment where employees work hard but have fun; and

 

   

having office locations in areas that are accessible and appealing, with office interior designs that are contemporary, collaborative and inspiring.

We believe that maintaining a vibrant and distinctive culture is critical to growing our business.


 

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Prudent expansion into new geographic markets

We have a wide footprint of delivery centers in a number of locations across Asia, Europe and Latin America to serve domestic, regional and global markets and we plan to expand our coverage. As of the date of this prospectus, we had offices in a total of ten geographies, including newly opened offices in Beijing in 2017; Barcelona in 2018; Cebu and Yokohama in 2019; Bogota, Hyderabad and Shanghai in 2020 and Bucharest in 2021. The expansion into new locations was driven by our strategy of growing to meet the needs of our existing clients, such as our clients expanding into new markets or seeking to replace their existing service providers. Since adding offices in these locations, we have also added new clients based in these countries, as well as internationally who have been attracted by our increased geographical capacities. We intend to continue to expand our footprint prudently, but rapidly, to ensure we can meet the evolving needs of our clients, including processes requiring multi-jurisdictional and multi-lingual capabilities, and better position ourselves to win new engagements from our existing clients and attract new clients.

In addition to expansion in recently entered markets, we have identified Korea and other Chinese regional markets where we do not currently operate as potential new markets for entry. In 2020, we established a new office in Hyderabad, India as an entry point to the Indian market and to serve as our hub for digital innovation and the global English market, established an office in Bogota, Colombia as an initial office marking our entrance into the Latin America market, and grew our China presence by establishing an office in Shanghai. We established an office in Romania in 2021 to address other opportunities, and we expect it to begin operations in the second half of 2021. We also intend to open an office in the Republic of Korea by 2022.

Key location criteria for setting up new offices include (i) the ability to tap a wide talent pool that has the desired skills to better cater to client requirements, (ii) minimal time zone difference with, and proximity to, existing and potential clients, and (iii) cost competitiveness.

Maintain operational efficiencies through streamlined operations

We strive to be a productive and efficient operator. For example, we utilize digital recruiting techniques, such as our Flash Hire platform, to minimize recruiting costs and improve candidate selection accuracy. We are also adept at educating and developing our employees, through our Flash Learn platform of online courses and learning opportunities, which is a fast and flexible way to train our workforce across multiple geographies. Our innovative digital operating platform, Flash, which we had implemented prior to the COVID-19 pandemic, has enabled us to continue to implement our growth strategy in new markets despite social distancing restrictions on in-person meetings and training sessions. We have business excellence teams that review our standard operating procedures, design customer interaction playbooks and gather and implement best practices across the organization. Larger campaigns also have campaign-specific materials developed to meet specific client needs. In addition, insights gained through our data analytics capabilities also help us optimize staffing levels, track key performance indicators and employee engagement, and enhance workforce management to realize operational efficiencies. As we grow in scale, we intend to further centralize our procurement processes for our infrastructure, technology, telecommunication equipment and professional services in order to lower costs and streamline supplier relationships.

Prudent strategic acquisitions and opportunistic partnerships

We plan to continue to expand our capabilities globally as well as across industry verticals and service offerings. While we expect this will primarily occur through organic growth, from time to time, we expect to selectively evaluate strategic partnerships, alliances and acquisitions to develop or acquire:

 

   

new clients within our existing client verticals, with minimal overlap with existing clients;


 

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new client verticals with high growth potential, such as industries where demand exceeds our ability to scale our business organically and other industries such as in financial technology, digital marketing and gaming;

 

   

new language capabilities to enter into new, large and diverse markets such as Europe and Latin America; and

 

   

new operational capabilities which can improve our efficiencies and complement our existing offerings, including the ability to introduce new offerings.

We believe that our strong balance sheet combined with our ability to grow our business and generate cash flows gives us a strong foundation for focused investments and further business expansion.

The chart below sets out our corporate structure as of the date of this prospectus.

 

LOGO

 

(1)

Effective ownership (voting powers).

(2)

Dormant entity.

Risks Related to Our Business and Industry

Below are certain risks associated with our business and industry. These risks are described in the section titled “Risk Factors”. These risks include the following:

 

   

Our largest clients account for a significant portion of our total revenue and any loss of a large portion of business from any of those large clients could have a material adverse effect on our business, financial condition and results of operations;

 

   

Our failure to successfully implement our business strategy and global, growth-oriented business model and sustain our growth rate and financial performance could harm our business;


 

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We operate in a highly competitive environment, and any failure to compete effectively against current and future competitors could adversely affect our revenue and profitability;

 

   

Our profitability will suffer if we are not able to maintain our pricing, control costs or continue to grow our business through higher value campaigns;

 

   

Effects of the novel coronavirus (COVID-19) as well as any other health pandemics on our and our clients’ business and operations could adversely affect our financial results;

 

   

Our success depends on the continued service of our Founder and certain of our key employees and management;

 

   

We may fail to attract and retain enough highly trained employees to support our operations;

 

   

A substantial portion of our operations and investments are located in Southeast Asia and we are therefore exposed to various risks inherent in operating and investing in the region;

 

   

Our key clients have significant leverage over our contractual terms and may terminate such contracts on short notice or require us to accept contractual terms that are more favorable to them;

 

   

Spending on omnichannel CX solutions by our clients and prospective clients is subject to fluctuations depending on many factors, including both the economic and regulatory environments in the markets in which they operate;

 

   

Increases in employee salaries and benefits expenses as well as changes to labor laws could affect our business;

 

   

We may be involved in disputes, legal, regulatory, and other proceedings arising out of our business operations, and may incur costs arising therefrom and may be affected by negative publicity which may have an adverse impact on our reputation and goodwill;

 

   

We may enter into contracts with significant fixed price elements or solely fixed price contracts with our clients and any failure to accurately price these arrangements may affect our profitability;

 

   

If our services do not comply with the service level and performance requirements required by our clients or we are in breach of our obligations under our contracts with our clients, it may result in reduced payments or the termination of our client agreements;

 

   

We are subject to risks associated with operating in the rapidly evolving new economy sectors;

 

   

We and our clients are subject to privacy, data protection and information security laws in the jurisdictions in which we and our clients operate; and

 

   

Our inability to protect our systems and data from continually evolving cybersecurity risks or other technological risks could affect our reputation among our clients and their customers and may expose us to liability.

Corporate Information

We were incorporated in the Cayman Islands on April 16, 2020 as TDCX Capital Pte Ltd and subsequently changed our name to TDCX Inc. on January 29, 2021. Our registered office in the Cayman Islands is at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our principal executive office is at 750D Chai Chee Road, #06-01/06 ESR BizPark @ Chai Chee, Singapore, Singapore 469004. Our telephone number at this location is +65 6309 1688. Our principal website address is www.tdcx.com. The information contained on our website does not form part of this prospectus. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.


 

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Because we are incorporated under the laws of the Cayman Islands, you may encounter difficulty protecting your interests as shareholder, and your ability to protect your rights through the U.S. federal court system may be limited. Please refer to the sections entitled “Risk Factors” and “Enforceability of Civil Liabilities” for more information.

Implications of Being a “Controlled Company”

Upon the completion of this offering, Mr. Laurent Junique, our Founder, Executive Chairman and Chief Executive Officer, will be the beneficial owner of an aggregate of 123,500,000 Class B ordinary shares, which will represent 86.8% of the then total issued and outstanding ordinary shares and 98.5% of the total voting power of our outstanding ordinary shares (or 85.1% of the then total issued and outstanding ordinary shares and 98.3% of the total voting power of our issued and outstanding ordinary shares if the underwriters exercise their option to purchase additional ADSs in full). As a result, we will remain a “controlled company” within the meaning of the NYSE listing rules and therefore we are eligible for, and, in the event we no longer qualify as a foreign private issuer, we intend to rely on, certain exemptions from the corporate governance listing requirements of the NYSE.

Implications of Being an Emerging Growth Company

As a company with less than US$1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include:

 

   

being permitted to provide only two years of selected financial information (rather than five years) and only two years of audited financial statements (rather than three years), in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure; and

 

   

an exemption from compliance with the auditor attestation requirement of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, on the effectiveness of our internal control over financial reporting.

We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year in which the fifth anniversary of the completion of this offering occurs, (2) the last day of the fiscal year in which we have total annual gross revenue of at least US$1.07 billion, (3) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which means the market value of our ordinary shares that is held by non-affiliates exceeds US$700.0 million as of the prior June 30, and (4) the date on which we have issued more than US$1.0 billion in non-convertible debt during the prior three-year period. We may choose to take advantage of some, but not all, of the available exemptions. We have included three years of selected financial data in this prospectus in reliance on the first exemption described above. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

Implications of Being a Foreign Private Issuer

Upon completion of this offering, we will report under the Exchange Act as a non-U.S. company with foreign private issuer status. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

 

   

the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;


 

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the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

 

   

the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission, or the SEC, of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events.

Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither emerging growth companies nor foreign private issuers.

In addition, as a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the corporate governance listing requirements of the NYSE. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing requirements of the NYSE. Following this offering, we will rely on home country practice to be exempted from certain of the corporate governance requirements of the NYSE, such that a majority of the directors on our board of directors are not required to be independent directors, our audit committee is not required to have a minimum of three members, and neither our compensation committee nor our nominating and corporate governance committee is required to be comprised entirely of independent directors.


 

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The Offering

 

Offering price

We currently estimate that the initial public offering price will be between US$16.00 and US$18.00 per ADS.

 

ADSs offered by us

18,772,000 ADSs (or 21,587,800 ADSs if the underwriters exercise the over-allotment option in full).

 

ADSs outstanding immediately after this offering

18,772,000 ADSs (or 21,587,800 ADSs if the underwriters exercise the over-allotment option in full).

 

Ordinary shares issued and outstanding immediately after this offering (includes Class A ordinary shares represented by ADSs)

142,272,000 ordinary shares (or 145,087,800 ordinary shares if the underwriters exercise the over-allotment option in full), comprising 18,772,000 Class A ordinary shares (or 21,587,800 Class A ordinary shares if the underwriters exercise the over-allotment option in full) and 123,500,000 Class B ordinary shares.

 

  Class B ordinary shares issued and outstanding immediately after the completion of the offering will represent 86.8% of our total issued and outstanding ordinary shares and 98.5% of the then total voting power (or 85.1% of our total issued and outstanding ordinary shares and 98.3% of the then total voting power if the underwriters exercise the over-allotment option in full).

 

The ADSs

Each ADS represents one Class A ordinary share.

 

  The depositary or its nominee will hold Class A ordinary shares underlying your ADSs. You will have rights as provided in the deposit agreement among us, the depositary and holders and beneficial owners of ADSs from time to time.

 

  We do not expect to pay dividends in the foreseeable future. If, however, we declare dividends on our Class A ordinary shares, the depositary will pay you the cash dividends and other distributions it receives on our Class A ordinary shares after deducting its fees and expenses in accordance with the terms set forth in the deposit agreement.

 

  You may surrender your ADSs to the depositary in exchange for Class A ordinary shares in accordance with the terms of the deposit agreement. The depositary will charge you fees for any exchange.

 

  We may amend or terminate the deposit agreement without your consent. If you continue to hold your ADSs after an amendment to the deposit agreement, you agree to be bound by the deposit agreement as amended.

 

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  To better understand the terms of the ADSs, you should carefully read the “Description of American Depositary Shares” section of this prospectus. You should also read the deposit agreement, which is filed as an exhibit to the registration statement that includes this prospectus.

 

Ordinary shares

Our ordinary shares will consist of Class A ordinary shares and Class B ordinary shares immediately prior to the completion of this offering. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Each Class A ordinary share is entitled to one vote; each Class B ordinary share is entitled to ten votes and is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of any Class B ordinary share by a shareholder to any person who is not an affiliate of such shareholder, or upon a change of ultimate beneficial ownership of any Class B ordinary share to any person who is not an affiliate of the registered shareholder of such Class B ordinary share, such Class B ordinary share will automatically and immediately convert into one Class A ordinary share. Each of our Class B ordinary shares is convertible into one Class A ordinary share at any time and will convert automatically upon the earlier of (i) the date that is 15 years from the date of effectiveness of the registration statement of which this prospectus forms a part or (ii) nine months after the death or permanent disability of Mr. Junique. For a description of Class A ordinary shares and Class B ordinary shares, see “Description of Share Capital.”

 

Over-allotment option

We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of 2,815,800 additional ADSs at the initial public offering price, less underwriting discounts and commissions, solely for the purpose of covering over-allotments.

 

Use of proceeds

We expect that we will receive net proceeds from this offering of approximately US$294.5 million, or approximately US$339.0 million if the underwriters exercise their option to purchase 2,815,800 additional ADSs from us in full, assuming an initial public offering price of US$17.00 per ADS, the mid-point of the estimated range of the initial public offering price set forth on the cover of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

 

 

We plan to use the net proceeds of this offering as follows: to repay the total outstanding principal amount of US$188.0 million and accrued and unpaid interest and premium, if any, under the Credit Suisse Facility, and the remainder to enable us to expand our business into new markets, which would include costs for premises, technology and systems and other infrastructure as well as for hiring of personnel


 

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and other expansion related expenses, and for general corporate purposes, including working capital needs and potential acquisitions.

 

Conflict of Interest

Because an affiliate of Credit Suisse Securities (USA) LLC, which is an underwriter in this offering, is the lender under the Credit Suisse Facility and will receive 5% or more of the net proceeds from this offering due to the repayment of the Credit Suisse Facility, Credit Suisse Securities (USA) LLC is deemed to have a conflict of interest within the meaning of Rule 5121 of the Financial Industry Regulatory Authority, Inc., or FINRA. Therefore, this offering will be conducted in accordance with FINRA Rule 5121, which requires, among other things, that a qualified independent underwriter has participated in the preparation of, and has exercised the usual standards of ‘‘due diligence’’ with respect to, this prospectus and the registration statement of which this prospectus forms a part. Goldman Sachs & Co. LLC has agreed to act as qualified independent underwriter for the offering and to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act, specifically including those inherent in Section 11 of the Securities Act. We have agreed to indemnify Goldman Sachs & Co. LLC against liabilities incurred in connection with acting as qualified independent underwriter, including liabilities under the Securities Act. See “Use of Proceeds” and “Underwriting—Conflict of Interest.”

 

Dividend policy

We do not intend to pay any dividends on our ordinary shares or ADSs for the foreseeable future. Instead, we anticipate that all of our earnings, if any, will be used for the operation and growth of our business. See “Dividends and Dividend Policy” for more information.

 

Lock-up

We and each of our directors, executive officers and Principal Shareholder have agreed, subject to certain exceptions, for a period of 180 days after the date of this prospectus, not to, except in connection with this offering, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any ADSs or ordinary shares or any other securities so owned convertible into or exercisable or exchangeable for ADSs or ordinary shares, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the ADSs or ordinary shares. See “Shares Eligible for Future Sale” and “Underwriting—Conflict of Interest.”

 

Indications of Interest

Certain affiliates and other persons and entities associated with our Founder and certain of our directors and officers have indicated interests in purchasing an aggregate amount not to exceed 2% of the ADSs being offered in this offering at the initial public offering price and on the same terms as the other ADSs being offered. Such indications of interests are not binding agreements or obligations to purchase, and we and the underwriters are under no obligations to sell any ADSs to such persons.

 

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Risk factors

See “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our ADSs.

 

Payment and settlement

The ADSs are expected to be delivered against payment on             , 2021. The ADSs will be deposited with a custodian as agent of the depositary in New York, New York. In general, beneficial interests in the ADSs will be shown on, and transfers of those beneficial interests will be effected only through, records maintained by JPMorgan Chase Bank, N.A. and its direct and indirect participants.

 

Listing

Application has been made for the listing of our ADSs on the NYSE.

 

Proposed trading symbol

“TDCX”

 

Depositary

JPMorgan Chase Bank, N.A.

Except as otherwise indicated, all information in this prospectus assumes:

 

   

the adoption and effectiveness of our amended and restated memorandum and articles of association, which will occur immediately prior to the completion of this offering; and

 

   

no exercise by the underwriters of the over-allotment option to purchase up to an additional 2,815,800 ADSs representing Class A ordinary shares from us.


 

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Summary Consolidated Financial and Other Data

The following summary consolidated financial data as of December 31, 2019 and 2020 and for the years ended December 31, 2018, 2019 and 2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary financial data as of December 31, 2018 is derived from audited financial statements not included herein. The consolidated financial data as of June 30, 2021 and for the six months ended June 30, 2020 and 2021 have been derived from our unaudited condensed interim consolidated financial statements included elsewhere in this prospectus. The summary financial data set forth below should be read in conjunction with, and are qualified by reference to, “Selected Consolidated Financial and Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with IFRS as issued by the IASB. Our historical results do not necessarily indicate results expected for any future period.

Summary Consolidated Statement of Profit or Loss and Other Comprehensive Income

 

    For the Six Months Ended
June 30,
    For the Year Ended December 31,  
    2021     2020     2020     2019     2018  
    US$     S$     S$     US$     S$     S$     S$  
    (in thousands except per share amounts)  

Revenue

    187,174       251,637       209,280       323,358       434,723       330,265       181,233  

Employee benefits expense

    (115,610     (155,426     (126,167     (191,896     (257,985     (189,912     (109,373

Depreciation expense

    (14,757     (19,839     (15,633     (24,595     (33,065     (24,599     (12,908

Rental and maintenance expense

    (4,223     (5,677     (5,856     (7,887     (10,603     (9,220     (2,623

Recruitment expense

    (3,358     (4,515     (3,942     (5,954     (8,005     (6,680     (3,792

Transport and travelling expense

    (396     (533     (670     (1,119     (1,504     (2,083     (1,358

Telecommunication and technology expense

    (2,916     (3,920     (3,013     (4,690     (6,305     (4,522     (2,385

Interest expense

    (2,787     (3,747     (1,496     (2,275     (3,058     (2,893     (1,128

Other operating expense

    (4,569     (6,144     (9,052     (11,779     (15,836     (10,478     (6,872

Gain on disposal of a subsidiary

                731       544       731              

Share of profit from an associate

    32       43             146       196              

Interest income

    129       174       245       443       594       465       268  

Other operating income

    2,041       2,744       3,866       5,590       7,514       717       546  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income tax

    40,760       54,797       48,293       79,885       107,397       81,060       41,608  

Income tax expenses

    (7,464     (10,034     (9,769     (15,846     (21,303     (7,524     (3,520
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit for the period/year

    33,296       44,763       38,524       64,039       86,094       73,536       38,088  

Other comprehensive income (loss)(1)

    (858     (1,153     1,344       398       536       840       (71
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period/year

    32,438       43,610       39,868       64,437       86,630       74,376       38,017  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted earnings per share (in US$ or S$)

    0.27       0.36       0.31       0.52       0.70       0.60       0.31  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pro forma basic and diluted earnings per share(2) (in US$ or S$)

    0.23       0.31                                
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Notes:

(1)

Other comprehensive income (loss) includes remeasurement of retirement benefit obligation and exchange differences on translation of foreign operations.

(2)

Unaudited basic and diluted pro forma net income (loss) per share data assumes that an additional 11,758,493 of our shares were issued and outstanding for the six months period ended June 30, 2021, which represents the number of shares of common stock that we expect to be issued to fund the debt repayment with the net proceeds of this offering as described in “Use of Proceeds.” The number of shares of common stock that we expect to be issued to fund the debt repayment was calculated in accordance with Staff Accounting Bulletin Topic 3.A. by dividing US$188.1 million, which is the estimated cost to repay indebtedness with the proceeds of this offering as described in “Use of Proceeds,” by US$16.00 per share, the low end of the initial public offering price range included on the cover of this prospectus less underwriting discounts and commissions.


 

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Summary Consolidated Statement of Financial Position

 

                                                                                   
     As of June 30,     As of December 31,  
     2021     2020     2019     2018  
     US$     S$     US$     S$     S$     S$  
     (in thousands)  

ASSETS

            

Current assets

            

Cash and cash equivalents

     60,370       81,162       44,486       59,807       35,920       23,973  

Fixed deposits

     5,655       7,602       5,748       7,727       837        

Trade receivables

     34,816       46,806       27,461       36,919       55,278       27,605  

Contract assets

     37,858       50,897       34,842       46,842       26,523       18,605  

Other receivables

     8,985       12,080       9,117       12,257       9,210       5,392  

Tax recoverable

                                   350  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

     147,684       198,547       121,654       163,552       127,768       75,925  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current assets

            

Pledged deposits

     1,766       2,374       1,768       2,377       2,110       2,096  

Other receivables

     3,389       4,558       4,369       5,874       3,708       2,931  

Plant and equipment

     35,344       47,516       30,185       40,581       40,730       24,911  

Right-of-use assets

     21,024       28,265       21,736       29,221       22,840       18,586  

Loan to an associate

                             784        

Deferred tax assets

     1,810       2,433       1,175       1,580       1,197       329  

Investment in an associate

     193       260       170       229       33       33  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current assets

     63,526       85,406       59,403       79,862       71,402       48,886  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

     211,210       283,953       181,057       243,414       199,170       124,811  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND (CAPITAL DEFICIENCY)/ NET EQUITY

            

Current liabilities

            

Other payables

     28,111       37,794       27,671       37,200       26,926       15,870  

Amount due to founder

                                   10,469  

Bank loans

     18,703       25,144       17,978       24,170       34,421       6,374  

Lease liabilities

     10,512       14,132       10,907       14,664       10,963       7,634  

Provision for reinstatement cost

     2,767       3,720       336       452              

Income tax payable

     9,209       12,381       9,861       13,257       6,956       3,229  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     69,302       93,171       66,753       89,743       79,266       43,575  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current liabilities

            

Bank loans

     196,303       263,910       12,002       16,136             24,174  

Lease liabilities

     12,822       17,238       13,257       17,823       14,498       12,495  

Provision for reinstatement cost

     3,374       4,536       4,178       5,617       4,955       1,817  

Defined benefit obligation

     1,282       1,723       1,067       1,435       769       315  

Deferred tax liabilities

     105       141       96       129       236       365  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     213,886       287,548       30,600       41,140       20,458       39,167  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Capital, reserves and non-controlling interest

            

Share capital

     12       16       *       *       *       *  

Reserves

     (203,616     (273,741     (14,760     (19,843     (20,650     (21,604

Retained earnings

     131,756       177,133       98,462       132,371       120,094       63,673  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Deficit)/Equity attributable to owners of the Group

     (71,848     (96,592     83,702       112,528       99,444       42,069  

Non-controlling interests

     (130     (174     2       3       2       1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Capital deficiency)/ Net equity

     (71,978 )      (96,766 )      83,704       112,531       99,446       42,070  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and (capital deficiency)/ net equity

     211,210       283,953       181,057       243,414       199,170       124,811  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Amount is less than S$1,000


 

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Summary Consolidated Statement of Cash Flows

 

                                                                                          
     For the Six Months Ended
June 30,
    For the Year Ended December 31,  
     2021     2020     2020     2019     2018  
     US$     S$     S$     US$     S$     S$     S$  
                                         (Restated)  
     (in thousands)  

Net cash from operating activities

     39,798       53,505       83,944       97,057       130,484       76,044       37,320  

Net cash used in investing activities

     (11,906     (16,006     (7,228     (17,615     (23,682     (27,627     (20,863

Net cash used in financing activities

     (11,559     (15,540     (1,962     (61,941     (83,274     (36,655     (10,680
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in cash and cash equivalents

     16,333       21,959       74,754       17,501       23,528       11,762       5,777  

Effect of exchange rate changes on balance of cash held in foreign currencies

     (449     (604     736       267       359       185       (71

Cash and cash equivalents at the beginning of the period/year

     44,486       59,807       35,920       26,718       35,920       23,973       18,267  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period/year

     60,370       81,162       111,410       44,486       59,807       35,920       23,973  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other Financial and Operating Data

 

                                                                     
     Six Months Ended
June 30,
     Year Ended
December 31,
 
   2021      2020      2020      2019      2018  

Revenue (S$ thousands)

     251,637        209,280        434,723        330,265        181,233  

Profit for the period (S$ thousands)

     44,763        38,524        86,094        73,536        38,088  

EBITDA (S$ thousands)(1)

     78,209        65,177        142,926        108,087        55,376  

Net profit margin (%)

     17.8        18.4        19.8        22.2        21.0  

EBITDA margin (%)(1)

     31.1        31.1        32.9        32.7        30.6  

Number of clients(2)

     43        41        38        38        36  

Number of agents(2)

     10,020        7,473        9,128        7,213        4,608  

Revenue per agent (S$ thousands)(3)

     28        27        54        54        49  

Debt (bank loans) (S$ thousands)

     289,054        40,113        40,306        34,421        30,548  

Debt/EBITDA Ratio(1)

     N/A        N/A        0.3        0.3        0.6  

 

Notes:

(1)

EBITDA, EBITDA margin and Debt/EBITDA Ratio are non-IFRS financial measures. We define EBITDA as profit for the year/period before interest expense, interest income, income tax expense and depreciation expense, EBITDA margin as EBITDA as a percentage of revenue, Debt as bank loans and Debt/EBITDA Ratio as bank loans divided by EBITDA. EBITDA, EBITDA margin and Debt/EBITDA Ratio are not measures calculated in accordance with IFRS. As a result of our early adoption of IFRS 16 Leases as of January 1, 2017 using the full retrospective approach, EBITDA and EBITDA margin disclosed may not be comparable to similarly titled measures reported by other companies as our calculation includes depreciation on the right-of-use assets and finance costs on lease liabilities. While we believe that EBITDA, EBITDA margin and Debt/EBITDA Ratio provide useful information to investors in understanding and evaluating our results of operations in the same manner as our management, our use of EBITDA, EBITDA margin and Debt/EBITDA Ratio has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under IFRS. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operational


 

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Metrics—Non-IFRS Financial Measures” for information regarding the limitations of using EBITDA, EBITDA margin and Debt/EBITDA Ratio as financial measures.

The following table presents a reconciliation of EBITDA to profit for the period and EBITDA margin to net profit margin, the most directly comparable financial measure calculated and presented in accordance with IFRS, for the periods indicated:

 

                                                                                   
     For the Year Ended December 31,  
     2020     2019     2018  
     US$     S$     Margin     S$     Margin     S$     Margin  
     (in thousands, except percentages)  

Revenue

     323,358       434,723             330,265             181,233        

Profit for the year and net profit margin

     64,039       86,094       19.8     73,536       22.2     38,088       21.0

Adjustments:

              

Depreciation expense

     24,595       33,065       7.6     24,599       7.4     12,908       7.1

Income tax expenses

     15,846       21,303       4.9     7,524       2.3     3,520       2.0

Interest expense

     2,275       3,058       0.7     2,893       0.9     1,128       0.6

Interest income

     (442     (594     (0.1 %)      (465     (0.1 %)      (268     (0.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA and EBITDA margin

     106,313       142,926       32.9     108,087       32.7     55,376       30.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     For the Six Months Ended June 30,  
     2021     2020  
     US$     S$     Margin     S$     Margin  
     (in thousands, except percentages)  

Revenue

     187,174       251,637             209,280        

Profit for the period and net profit margin

     33,296       44,763       17.8     38,524       18.4

Adjustments:

          

Depreciation expense

     14,757       19,839       7.9     15,633       7.5

Income tax expenses

     7,464       10,034       4.0     9,769       4.7

Interest expense

     2,787       3,747       1.5     1,496       0.7

Interest income

     (129     (174     (0.1 %)      (245     (0.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA and EBITDA margin

     58,175       78,209       31.1 %      65,177       31.1 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(2)

The number of clients and number of agents are calculated as of December 31 of the year indicated or as of June 30 of the period indicated.

(3)

Revenue per agent is calculated as revenue for a period divided by the average of the number of agents at the end of each month during such period. We monitor our revenue per agent because we believe it measures our success in expanding our client relationships higher up the value chain. Our client contracts are mostly based on a fixed rate per FTE dedicated and assigned to the applicable campaign. Under our employee classification system, an FTE is classified as an “agent.”


 

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RISK FACTORS

This offering and an investment in the ADSs involve a significant degree of risk. Prospective investors should carefully consider the risks described below, together with the financial and other information contained in this Prospectus before deciding to purchase the ADSs. There may be additional risks not presently known to us or that we currently believe to be immaterial, which could turn out to be material. Our business, financial condition and results of operations could be adversely affected by any of these risks, should they occur, and turn out to be material. If any of the following risks actually occurs, our business, financial condition and results of operations could be adversely affected and, as a result, the trading price of our Shares could decline and you could lose all or part of your investment in the ADSs.

This Prospectus also contains forward-looking statements which involve risks and uncertainties. Our actual results of operations could differ materially from those anticipated in these forward-looking statements due to a variety of factors, including the risks described below and those discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Prospectus. See the section entitled “Special Note Regarding Forward-Looking Statements” of this Prospectus.

Before deciding to invest in the ADSs, prospective investors should seek professional advice from their advisors about their particular circumstances.

Risks Related to Our Business and Industry

Our largest clients account for a significant portion of our total revenue and any loss of a large portion of business from any of those large clients could have a material adverse effect on our business, financial condition and results of operations.

We are dependent upon the business relationships we have developed with our largest clients, including our ability to retain our clients. In the past we have derived and, as of the date of this prospectus, we believe that we will continue to derive, a significant portion of our revenue from our two largest clients, Facebook and Airbnb. On a combined basis these two clients accounted for a total of 52.0%, 65.9%, 60.4%, 62.3% and 62.3% of our revenue for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, respectively. Our top five clients for each of 2018, 2019 and 2020, on a consolidated basis, accounted for a total of 83.4%, 88.9% and 83.8% of our total revenues in the years ended December 31, 2018, 2019 and 2020, respectively. Our top five clients for each of the six months ended June 30, 2020 and 2021, on a consolidated basis, accounted for a total of 87.0% and 84.6% of our total revenues in the six months ended June 30, 2020 and 2021, respectively.

In addition, there can be no assurance that the volume of work to be performed by us for our largest clients will not vary significantly from year to year in the aggregate, particularly since we are not the exclusive service provider for our clients generally. Furthermore, one of the key services we provide to one of our largest clients is content monitoring and moderation, which has become a growth business for us. There can be no assurance that current trends related to content monitoring and moderation will not reverse. A number of factors other than the price and quality of the services we provide, such as a change in the financial profile of a client, change of leadership or strategy within a client’s senior management, or a corporate reorganization, merger or other acquisition involving a client, could result in the loss or reduction of business from any of our clients, including our largest clients, and we cannot predict the timing or occurrence of any such event. The loss of revenue from our largest clients may have an adverse effect on our business, financial condition and results of operations.

Our failure to successfully implement our business strategy and global, growth-oriented business model and sustain our growth rate and financial performance could harm our business.

We are a high-growth digital customer experience solutions provider for technology disruptors and other blue-chip companies and provide omnichannel CX solutions, sales and digital marketing services, content

 

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monitoring and moderation services and other services. The execution of our business strategy is critical in order for our overall business to achieve economies of scale and increase our profitability.

Our business strategy involves hiring, training and retaining skilled personnel, developing or acquiring technology solutions that we incorporate in our services and maintaining and growing a globally oriented expertise in the industries that comprise the new economy. Our business strategy may strain our existing management resources, operational, financial and management information systems and IT solutions to the point that they may no longer be adequate to support our operations, requiring us to incur significant expenditures in these areas. We expect that we will need to develop further financial, operational and management controls, reporting systems and procedures to accommodate future growth. We cannot assure you that we will be able to develop these controls, systems or procedures on a timely basis, or at all.

Our success in implementing our business strategy and global, growth-oriented business model may be adversely affected by other factors within and outside of our control, including the following:

 

   

size, timing and profitability of significant campaigns or engagements with current or new clients;

 

   

changes in the volume of work we receive on a full-time equivalent basis from campaigns;

 

   

the inability to accurately predict and in a timely manner fulfill FTE requirements on our campaigns;

 

   

changes in global business services demand due to any reason, including changes in laws, regulations or perceptions of outsourcing operations to offshore service providers;

 

   

the inability to continually improve or adapt to rapid technology changes;

 

   

adverse changes to our cost structure;

 

   

our inability to operate and manage a larger operation as we grow our market share and enter into international markets;

 

   

existing or potential clients’ decisions to stay with existing service providers or move services we provide in-house;

 

   

the inability to win new campaigns through competitive bidding processes;

 

   

the inability to attract qualified employees;

 

   

the inability to manage foreign exchange fluctuations;

 

   

operational, financial and legal challenges (including compliance with foreign laws);

 

   

costs associated with entering new and unfamiliar geographies or commencing significant new campaigns for our current and future clients; and

 

   

negative press and reputational risks that adversely affect our brand, including similar risks to our industry.

Our failure to successfully execute our business strategy and global, growth-oriented business model could also adversely affect our future operating performance and cash flow, which in turn could restrict our ability to source high quality human capital and talent, innovate new tools and services offerings, make our operations more efficient and grow our business. We cannot assure you that we will be able to successfully execute our growth strategy or implement our planned business strategy and failure to do so could have an adverse effect on our business, financial condition and results of operations.

We operate in a highly competitive environment, and any failure to compete effectively against current and future competitors could adversely affect our revenue and profitability.

Our industry is very competitive. We primarily compete on the basis of the quality of the services we provide and expertise in tailored services for our clients. We believe that the other principal competitive factors in the

 

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markets in which we operate are price, value proposition to clients, breadth of geographical reach and industry expertise. We primarily face competition from other customer experience business services providers as well as firms specializing in customer relationship management consulting, customer engagement solution providers and in-house customer engagement operations. We typically are not an exclusive service provider for our clients as they usually prefer to engage more than one provider in each customer region to reduce their provider concentration risk. See “Business—Competition.”

According to Frost & Sullivan, the growing impetus for modernizing the customer experience to maintain competitive differentiation, rising usage for non-voice channels in addition to other channels of communication, and building of efficient customer experience centers through the use of machine learning and artificial intelligence technologies are driving the demand for outsourced customer experience, or CX, services in the new economy industry. This trend may result in new and different competitors entering our markets. These competitors may include entrants from the telecommunications, IT, software and data networking industries or entrants in geographical locations with lower costs than those in which we operate.

Some of these competitors have and in the future may continue to have greater financial, human and other resources, longer operating histories in particular regions, greater geographical reach, greater technological expertise and more established relationships with particular clients and prospective clients. In addition, some of our competitors may enter into strategic or commercial relationships among themselves or with larger, more established companies in order to increase their ability to address customer and client needs and reduce operating costs, or enter into similar arrangements with potential clients. Further, trends of consolidation in our industry and among business services competitors may result in new competitors with greater scale, a broader footprint, better technologies and price efficiencies attractive to our clients.

We also may face competition from our clients if they decide to bring the services we provide in-house or consolidate the number of vendors they use for the services we provide. Increased competition, our inability to compete successfully, pricing pressures or loss of market share could result in reduced operating profit margins which could have a material adverse effect on our business, financial condition and results of operations.

Our profitability will suffer if we are not able to maintain our pricing, control costs or continue to grow our business through higher value campaigns.

Our profit margin, and therefore our profitability, is largely a function of our level of activity and the rates we are able to charge for our services. If we are unable to maintain the pricing for our services without corresponding cost reductions, our profitability will suffer. The pricing and levels of activity we are able to achieve are affected by a number of factors, including our clients’ perceptions of our ability to add value through our services, the length of time it takes to on-board new employees on any new or current campaigns, the volume of work for new clients or new campaigns with current clients, competition, the introduction of new services or products by us or our competitors, our ability to accurately estimate, attain and sustain revenue from client contracts and general economic conditions.

Our profitability is also a function of our ability to control our costs and improve our efficiency and productivity. As we increase the number of our employees and locations at which we operate and execute our global growth strategy, we may not be able to manage the significantly larger and more geographically diverse workforce that may result, which could adversely affect our ability to control our costs or improve our efficiency. Further, because there can be no assurance that our business will grow at the rate that we anticipate or that we will be successful in growing our business in new geographies and markets that we enter, we may incur expenses for the increased capacity for a significant period of time without a corresponding growth in our revenues.

Our agreements with our clients are typically for one to three year terms and many of our agreements have automatic renewal terms or renewal terms to be entered into at the election of our clients. Accordingly, we may be bound by pricing and other established terms during the renewal periods and so we may not be able to revise pricing or other terms to take account for market conditions, including changes in labor costs.

 

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We may be unable to reduce our capacity if demand for our services decreases or if we overestimate the future demand for our current clients. In the case where demand for our services decreases, we may have lower capacity utilization rates until we can decrease our labor capacity to meet any such decrease in demand.

Any failure by us to maintain our pricing, control or adjust costs to the level of activity or adjust the pricing and terms of our client agreements to market conditions could adversely affect our business, financial condition and results of operations.

Effects of the novel coronavirus (COVID-19) as well as any other health pandemics on our and our clients’ business and operations could adversely affect our financial results.

Contagious diseases have spread throughout the world, including in certain parts of Asia where the majority of our operations are located. Most recently, the global outbreak of the COVID-19 pandemic has created significant volatility and uncertainty and economic disruption. The COVID-19 pandemic is ongoing with new variants believed to be spreading across the world, and has caused adverse effects on our and our clients’ operations during 2020 and 2021. For example, as each jurisdiction in which we operate imposed social distancing measures and we were required to either partially or completely reduce physical headcount in our offices, we implemented a work from home strategy in order to comply with such measures. In many cases, this involved a certain period of transition while we worked with our employees to ensure adequate work from home working conditions, which resulted in temporary periods of lower productivity, and additional costs incurred as we worked to ensure that our employees have adequate equipment and systems to support their work from home arrangements. Work from home arrangements also present other issues, such as potential cybersecurity risks and there can be no assurance that the systems we have in place will be effective at preventing cybersecurity threats or that we and our clients would agree on an acceptable work from home arrangement or that we would be able to comply with the conditions of any agreed upon work from home plan. There can also be no assurance that we will be able to meet all local guidelines as we transition personnel back to the office and as local social distancing rules and regulations change in the jurisdictions in which we operate. Additionally, our delivery centers typically seat hundreds of employees in one location. An outbreak of COVID-19 or similar contagious infection in one or more markets in which we do business may result in disruptions or restrictions on our ability to continue operations without interruption, such as significant worker absenteeism, lower seat utilization rates, lower productivity, as well as temporary closures of our delivery centers or the facilities of our clients, which could adversely affect our ability to deliver our services. We could also see an increase in health care costs for employees due to emerging regulations regarding COVID-19 testing, telemedicine, and in the future, coverage for any vaccine. The spread or resurgence of COVID-19 in any country where we have operations could impair our day-to-day service delivery from our affected offices and client campaigns and result in, among other things, losses of revenue and cause us to fail to meet certain KPIs in our client contracts.

In addition, the effects of COVID-19 have adversely affected certain of our clients’ businesses, particularly our clients in or exposed to travel and hospitality industries. This effect on our clients’ businesses has, in turn, resulted in decreased demand for our services from our clients in those affected industries, including some of our largest clients on whom we are significantly dependent. In response to this decreased demand, we have reduced the number of employees dedicated to these campaigns and either re-allocated them to other campaigns or, if necessary, terminated their employment with us. There can be no assurance that our clients will not decide to further reduce their demand for our services due to COVID-19-related effects on their business and that we will not have to reduce headcount in response. Furthermore, our results of operations have been materially adversely impacted as a result of COVID-19 and there can be no assurance that we would not be materially and adversely impacted in the future from the effects of COVID-19 or another pandemic, including from any loss of business, if any of our clients face significant business disruptions or demand for our clients’ services falls as a result of COVID-19 (or any disease outbreak that results in a health pandemic). As our agreements typically have payment terms of 30 to 90 days, any change in our clients’ cash flows that restrict their ability to make payments for services we have rendered may adversely affect our cash flows and results of operations. Our clients have delayed, and may in the future delay, planned engagements or choose to terminate existing agreements prior to the end of any term for convenience or decide not to renew their agreements with us.

 

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Finally, COVID-19 or any other pandemic may result in difficulty accessing the capital markets on attractive terms, or at all, and a severe disruption and instability in the global financial markets, or deterioration in credit and financing conditions which could adversely affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis or at all.

Any outbreak of a contagious disease in Asia or elsewhere (including the recent COVID-19 coronavirus or other diseases in the future), or fear or public perception of an outbreak, could have a negative impact on the economy and business activity in the markets in which we and/or our clients operate, thereby adversely impacting our operations and business. Any outbreak of disease or prolonged epidemic in the geographies in which we or our clients operate could severely disrupt our business operations and have an adverse effect on our business, financial condition and results of operations. See “Business—COVID-19 Risk Mitigation and Continuity of Operations.”

Our success depends on the continued service of our Founder and certain of our key employees and management.

Our operational business model is focused on the empowerment of our country directors and our success (including maintaining our corporate culture) depends on the continued service and performance of our country directors as well as our executive officers and other key personnel. There is competition for experienced senior management and personnel with expertise in our industry, and we may not be able to retain our key personnel or recruit skilled personnel with appropriate qualifications and experience.

Furthermore, our Founder also serves as our Executive Chairman and Chief Executive Officer and his involvement in our Company is essential to the success of our Company. Our Founder plays a central role in the development and implementation of our business strategies and initiatives. At the time of this prospectus, we have not procured any “key person” insurance policy which covers our Founder.

Any decrease in the involvement of our Founder in our business or loss of key members of our personnel, particularly to competitors, could have an adverse effect on our business, financial condition and results of operations.

We may fail to attract and retain enough highly trained employees to support our operations.

The outsourced business support services industry relies on large numbers of highly trained employees at delivery centers. The demand for talent is even more important for business services companies, such as our Company, that provide complex and high-value services, including content moderation and digital services support. Therefore, our success depends to a significant extent on our ability to attract, hire, train and retain talented and skilled employees. Our industry is prone to high employee attrition, which requires us to continuously hire and train new employees. According to Frost & Sullivan, our industry has had an average annual attrition rate of 30% to 34% in the Asia Pacific region. There is significant competition for trained employees with the skills necessary to perform the services we offer to our clients, including employees that are proficient in certain high-demand languages. In addition, we compete for employees, not only with other companies in our industry, but also with companies in other industries and in many locations where we operate, there may be a limited number of highly trained employees for a number of reasons, including government-imposed regulations and policies related to expatriate and foreign permitting that could limit the number and availability of foreign workers in certain jurisdictions. We often rely on expatriate employees to fill roles that cannot be performed by locally-hired agents due to combination of specialized skillset, native languages and cultural skills. If qualified personnel cannot immigrate to or obtain work visas in a country where we require their services, we may have difficulty hiring the requisite number of local workers with the requisite skills for our campaigns, or we may exceed our budgets in order to do so. In particular, in Thailand, our subsidiary, Teledirect Telecommerce (Thailand) Limited, has been granted certain privileges by the Board of Investment of Thailand, or the BOI, which are comprised of incentives for business development in Thailand and includes, among other

 

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things, certain exceptions allowing us to hire foreign technicians and experts to work on promoted projects and the ability to secure visas for foreign employees with a faster approval time than is otherwise available for non-promoted businesses in Thailand. However, these privileges are subject to a number of conditions (as amended from time to time) including the requirement to have no later than August 23, 2021, which was later extended to August 23, 2022 as approved by the BOI, and maintain through the promotion period, a ratio of domestic to foreign employee of at least three to one. As of June 30, 2021, our ratio of domestic to foreign employees in Thailand was approximately 2.8 to 1. Although we are actively managing our headcount in Thailand for compliance with the BOI’s domestic employee requirement, there can be no assurance that we will reach the requisite ratio by the current deadline, in which case the BOI could revoke our privileges and incentives, which could cause our foreign employees to lose their employment visas, which could materially affect our operations in Thailand.

Increased competition for qualified personnel could also have an adverse effect on our business. Additionally, a significant increase in the attrition rate among trained employees could result in increased costs, disrupted revenue streams and decreased profit margins.

In addition, our ability to maintain and renew existing engagements, obtain new business and increase our margins will depend, in large part, on our ability to attract, hire, train and retain skilled employees that enable us to keep pace with the growing demand for business services, evolving industry standards, new technology applications and changing client preferences. Our failure to attract, hire, train and retain personnel with the experience and skills necessary to fulfill the needs of our existing and future clients or to assimilate new employees successfully into our culture and our operations could have an adverse effect on our business, financial condition and results of operations.

A substantial portion of our operations and investments are located in Southeast Asia and we are therefore exposed to various risks inherent in operating and investing in the region.

For the year ended December 31, 2020 and the six months ended June 30, 2021, we derived 91.4% and 91.0%, respectively, of our revenue from our operations in countries located in Southeast Asia. We intend to continue to develop and expand our business and capacity in Asia with our current and potential clients. Our operations and investments in Southeast Asia are subject to various risks related to the economic, political and social conditions of the countries in which we operate, including risks related to the following:

 

   

inconsistent regulations, licensing and legal requirements may increase our cost of operations among the countries in Southeast Asia in which we operate;

 

   

currencies may be devalued or may depreciate or currency restrictions or other restraints on transfer of funds may be imposed;

 

   

the effects of inflation within Southeast Asia generally and/or within any specific country in which we operate in Southeast Asia;

 

   

governments may impose new or more burdensome regulations, taxes or tariffs;

 

   

political changes may lead to changes in the business environments in which we operate;

 

   

economic downturns, political instability, civil disturbances, military conflict, terrorism and general security concerns in the countries that either we or our clients operate may negatively affect our operations;

 

   

enactment or any increase in the enforcement of regulations related to personal data protection in the areas in which we operate that may incur compliance costs;

 

   

health epidemics (including the COVID-19 outbreak) may affect our operations and demand for our services; and

 

   

natural disasters like volcano and earthquakes may impact our operational sites severely.

 

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Additionally, the laws in the countries we operate may change and their interpretation and enforcement may involve significant uncertainties that could limit the reliability of the legal protections available to us. We cannot predict the effects of future developments in the legal regimes in the countries we operate.

Any of the foregoing risks may adversely affect our business, financial condition and results of operations.

Our key clients have significant leverage over our contractual terms and may terminate such contracts on short notice or require us to accept contractual terms that are more favorable to them.

Our relationships with our clients are governed by master services agreements, or MSA, and a number of statements of work, or SOWs, which set out the details of our services we provide to our clients. Our current MSA with Facebook has a primary term of 12 months and automatic 12-month renewal periods thereafter (unless terminated by Facebook). On August 1, 2021, we entered into a new MSA with Airbnb for an initial term as well as two extension options (unless terminated by Airbnb). While our MSAs have traditionally been renewed and have not been terminated by our largest clients as of the date of this prospectus, there can be no assurance that our agreements with any of our clients, will be renewed upon their expiration on commercially favorable terms or at all or will not be terminated early pursuant to their respective terms.

A contract termination, non-renewal of a contract when it expires, or significant reduction in the use and number of services under our contracts with our key clients could result in a lower utilization rate, which would result in decreased operating margins and profitability. We may not be able to replace any key clients that elect to terminate, scale back, or not renew its contract with us, which would have an adverse effect on our business, financial condition and results of operations.

Our key clients may require us to accept contractual terms that are less favorable to us. For example, if our key clients require us to extend the payment periods beyond the current 30 to 90 day typical range, our working capital levels and overall financial position could be adversely affected, which may make it more difficult to finance our capital expenditures or increase our borrowing costs. In addition, our two largest clients require us to include staffing related restrictions. For example, if certain project team members, such as senior project managers and certain other employees with access to sensitive client information, leave the relevant client’s project, we must wait a certain period of time before we can staff that employee on a project for a different client in the same industry. These restrictions do not restrict our ability to transfer agents, who comprise the vast majority of our staff, among competing clients or otherwise restrict us from servicing or acquiring clients within the same industries as, or who are direct competitors to, our existing clients. In addition, we may from time to time enter into exclusivity arrangements with our clients which may prohibit us from working with identified competitors or with businesses operating in the same industries as our clients.

The anticipated strategic and financial benefits of our relationship with Airbnb may not be realized.

Pursuant to our arrangements with Airbnb, we are currently in the process of negotiating with Airbnb the potential issuance of warrants to acquire some of our ordinary shares. We expect, subject to negotiation and agreement on terms and conditions, that we would grant Airbnb a warrant on the basis that the warrant would result in a growth in revenues. In the event that we are unable to agree to the terms of such warrant and such warrant is not issued, it could negatively affect our business relationship with Airbnb, which could result in a reduced volumes of work and lower revenues, or at least, lower growth than we otherwise anticipated. In addition, even if such warrant is issued, achieving the anticipated benefit from the warrant is subject to a number of challenges and uncertainties. If we are unable to achieve our objectives or if we experience delays, the expected benefits may be only partially realized or not at all, or may take longer to realize than expected, which could adversely impact our financial condition and results of operations.

 

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Spending on omnichannel CX solutions by our clients and prospective clients is subject to fluctuations depending on many factors, including both the economic and regulatory environments in the markets in which they operate.

Our clients’ budgets for our services and reductions in client spending arising from or related to economic slowdown in the markets in which our clients operate have in the past adversely impacted our revenues, gross profits, operating margins and results of operations. Certain events outside of the control of our clients, such as regulatory and political developments, may occur and adversely affect our revenues, gross profits, operating margins and results of operations. These economic conditions can occur abruptly. For example, the recent COVID-19 outbreak has caused volatility and uncertainty in the global economy. COVID-19 has adversely impacted us and many of our clients, and the extent to which COVID-19 may continue to impact our financial condition or results of operations in the future is uncertain and will depend in part on its impact on our clients and prospective clients and their customers. See “—Effects of the novel coronavirus (COVID-19) as well as any other health pandemics on our and our clients’ business and operations could adversely affect our financial results.”

Increased regulation, changes in existing regulation or increased government intervention in the industries in which our clients operate may adversely affect the growth of their respective businesses, which in turn may reduce demand for our services or cause us to incur additional costs in our processes or personnel, thereby negatively affecting our business, results of operations and financial condition. For example, our clients may be subject to stringent compliance requirements, including privacy and security standards for handling data, which could impact the manner in which we provide our services. Further, regulators have imposed guidelines for use of cloud computing services that mandate specific controls or require financial services enterprises to obtain regulatory approval prior to outsourcing certain functions. See also “—Anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing could impair our ability to serve our clients and materially adversely affect our business, results of operations and financial condition.”

Reduced or delayed spending by our clients may also lead to our clients cancelling ongoing projects with us, requesting pricing reductions or consolidating the service providers that they partner with. In the past, such events have adversely impacted our utilization rates, monthly revenue per FTE, the competitiveness of our proposals and our gross margins.

The business challenges and pressures resulting from economic slowdown in the markets in which our clients operate could also affect their credit ratings and our credit terms with them, leading to adverse impact on our cash flow and results of operations. Any of the foregoing could adversely affect our business, financial condition and results of operations.

Increases in employee salaries and benefits expenses as well as changes to labor laws could affect our business.

Employee benefits expenses were S$109.4 million, S$189.9 million, S$258.0 million, S$126.2 million and S$155.4 million in the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, representing 78.5%, 76.7%, 77.4%, 76.8% and 79.3% of our total operating expenses in each period, respectively.

Employee salaries and benefits expenses in all of the countries in which we operate have increased over recent years as a result of economic growth, increased demand for business services and increased competition for trained and talented employees and we cannot assure that they will not continue to rise. Our expenses may also increase if we implement employment compensation schemes, such as an employee stock option plan, to attract talent. Following the closing of the offering, we expect to award, subject to the approval of our board of directors, up to approximately 1,815,000 Class A ordinary shares to certain of our directors, officers and other senior employees under the terms of our PSP. For the purpose of preparing our financial statements, we expect

 

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that such share grants will be valued at the fair value of such awards at the date of such award. Accordingly, commencing in the fourth quarter of the year ended December 31, 2021, we expect to start incurring share-based payment expense with respect to such awards. For more information on our PSP, see “Management — Performance Share Plan.”

We attempt to control our costs as we grow our capacity in existing locations or enter into new geographies. We may need to increase salaries more significantly and rapidly than in previous periods as part of our efforts to remain competitive or meet the demand for our services, which may cause our labor costs to increase. In addition, depending on the state of the labor market for our employees at any given time, we may need to increase employee compensation more than in previous periods to remain competitive in attracting the quantity and quality of employees that our business requires. Wage increases may reduce our operating margins and adversely affect our profitability if our revenue remains stagnant or if we face price pressure from competition.

If we expand our operations into new geographies within which prospective employee pool have higher average wages and compensation expectations, our average or overall labor costs may increase which will reduce our margins and profitability, especially when we enter into new markets and seek to grow our business in new geographies where we have no track record.

Furthermore, most of the countries in which we operate have labor laws which protect the interests of workers, including statutorily mandated minimum wage increases, legislation that imposes financial obligations on employers and laws governing the employment of workers. We are also required to provide employee retirement by law in certain countries, such as the Philippines and Thailand, where we have made provisions for such retirement plans in our financial statements. Certain jurisdictions, such as Thailand and Singapore, also have laws that restrict our ability to hire foreign workers by setting caps on the proportion of foreign workers in the workforce of the applicable jurisdictions. In Thailand, we have received certain incentives issued by the Board of Investment of Thailand. See “—We may fail to attract and retain enough highly trained employees to support our operations.”

These labor laws in one or more of the key jurisdictions in which we operate, including Singapore and the Philippines, may be modified in the future in a way that causes our costs to increase and any such changes may be detrimental to the business that we operate in such jurisdiction. The implementation or increase of additional labor laws in the countries we operate may reduce our profit margins and have an adverse effect on our business, financial condition and results of operations.

We may be involved in disputes, legal, regulatory, and other proceedings arising out of our business operations, and may incur costs arising therefrom and may be affected by negative publicity which may have an adverse impact on our reputation and goodwill.

From time to time we are, and in the future may continue to be, involved in disputes with various parties in the course of our business including clients, employees and ex-employees. Such disputes may involve various matters such as business disputes, employment matters and regulatory compliance.

In particular, from time to time, we have been the subject of complaints and claims made by our ex-employees in relation to, for instance, claims of unfair dismissal and disputes over employment contracts and terms. These disputes may lead to legal or other proceedings and may result in costs, negative publicity, and the diversion of resources and management’s attention regardless of the outcome. Any negative publicity arising from such disputes or complaints against our Company, whether founded or unfounded, may tarnish our reputation and goodwill and could cause our clients or future clients to not use our services.

In particular, the business practices of companies that offer content moderation and curation services have been subject to increasing scrutiny over their business practices and the treatment and wellbeing of the employees who work in these areas. Several other companies operating in other countries offering these services have been

 

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subject to lawsuits by their employees and ex-employees relating to allegations of post-traumatic stress disorder and related trauma. While we work diligently to ensure that our work practices and work culture support healthy employee well-being and we operate in countries with different legal regimes than other cases, there can be no assurances that we will not also be subject to similar legal actions. In addition, many of the services we provide our clients are complex, such as trust and safety verification and quality and compliance audits, we may face potential liability if we do not perform in accordance with the requirements of our agreements.

In addition, we may become involved in disputes, legal, regulatory, and other proceedings between our clients and third parties, such as our clients’ customers, in connection with the services that we provide. Some of our clients, and in particular our top clients, are larger than we are and may be more likely to become involved in such matters given the scale of their businesses. If we become involved in such matters, we may be required to expend significant resources, including our management’s time, and incur significant expenses in defending against such actions. There can be no assurance that an adverse judgment or decision against us will not be significant. Our clients do not indemnify us for these types of costs, and there can be no assurance that such costs will be covered, in whole or in part, by our insurance policies.

Negative publicity or announcements may also include, amongst others, our involvement in litigation or regulatory investigations, online complaints or negative reviews of our business (anonymous or otherwise), or unfavorable third-party research reports on us. We cannot assure you that attempts to resolve any outstanding disputes would not be protracted or that similar claims would not be asserted. If we were to fail to win these disputes, we may incur losses and face liabilities. Further, even if we were to win these disputes, we may incur costs in mounting our defense and loss of business.

Responding to disputes and/or negative publicity arising from any of the above circumstances, regardless of their ultimate outcomes and notwithstanding that they may be baseless, frivolous or vexatious, can divert the time and effort of our management from our business. Claims and complaints that assert some form of wrongdoing, regardless of the factual basis for the assertions being made, may further result in negative publicity, lawsuits, or investigations by regulators. Any unfavorable decisions by regulators may result in regulatory sanctions against us and other person(s) responsible for the breach, including the imposition of fines and/or term of imprisonment, where applicable.

Further, we cannot assure you that the public perception of our business and our brands would not be materially affected in the event of such disputes or that we will be successful in defending such claims. Any negative impact on our reputation could materially and adversely affect our business, financial condition and results of operations.

We may enter into contracts with significant fixed price elements or solely fixed price contracts with our clients and any failure to accurately price these arrangements may affect our profitability.

Many of our client contracts have significant fixed price elements. If we underestimate our project costs in tendering and bidding for a project from our clients, we may incur unanticipated costs that would reduce our profits or incur losses. Any failure by us to inaccurately evaluate our expected costs for a fixed-price contract may result in the decreased profitability of any such project and may have an adverse effect on our business, financial condition and results of operations. To address this risk, we try to incorporate pricing adjustments in our contracts in the event that there is a change in scope of work that can be activated under reasonable circumstances that are beyond assumptions made by us during our initial pricing (e.g., expanded work scope, foreign exchange volatility). There can be no assurance that such price adjustments will fully cover the actual costs to provide such services, which could have an adverse effect on our business, financial condition and results of operations.

 

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If our services do not comply with the service level and performance requirements required by our clients or we are in breach of our obligations under our contracts with our clients, it may result in reduced payments or the termination of our client agreements.

Most of our contracts with clients contain service level and performance requirements, including requirements relating to the quality of our services and the timing and quality of responses to our end-customer based on certain key performance indicators, such as the time it takes for a customer experience matter to be closed out, customer satisfaction score and forecast accuracy. In some cases, the quality of services that we provide is measured by quality assurance indicators and surveys which are based in part on the results of direct monitoring by our clients of interactions between our employees and our clients’ end-customers. Failure to consistently meet service requirements of such end-customers or errors made by our employees in the course of delivering services to such end-customers could disrupt our clients’ businesses and result in a reduction in revenue or a claim against us for damages. For example, our agreements generally stipulate standards of service that, if not met by us, would result in lower payments to us. A failure or inability to meet these requirements of such representations could seriously damage our reputation and affect our ability to attract new business or result in a claim for damages against us, which could have a material adverse effect on our business, financial condition and results of operations.

We are subject to risks associated with operating in the rapidly evolving new economy sectors.

As a new economy business services provider dedicated to serving new economy participants internationally, we are subject to risks associated with the rapidly evolving nature of new economy sectors, including but not limited to the technology, consumer and retail, and hospitality sectors. Our future business, financial condition, and results of operations will largely depend on the development of the new economy sectors and their participants in the markets that we operate and target for future expansion.

According to Frost & Sullivan, as the outsourcing market in the traditional economy industry matures, service providers are now expanding their presence in the new economy high growth industries. New economy companies are investing in creating differentiated customer experiences and providing end-to-end customer engagement that can differentiate them from their competitors. However, there are significant uncertainties with respect to the growth and sustained profitability of new economy sectors in Asia and throughout the world, including changes in general economic conditions, market trends and regulatory environment. Most of these factors are beyond our control. For example, any adverse regulatory developments in new economy sectors in the countries in which we or our clients operate, such as new or more restrictive industry policies, could materially affect the results of operations and financial conditions of our clients participating in such industries, which may in turn reduce their demand for our services. As a result, our business, financial condition and results of operations could be adversely affected.

We and our clients are subject to privacy, data protection and information security laws in the jurisdictions in which we and our clients operate.

We are typically required to collect and store sensitive data in connection with our services, including account access credentials, credit and debit card numbers, bank account numbers, social security numbers, names and addresses and other types of sensitive business or personal information. In many cases, customer information is stored in our client’s proprietary systems to which our employees have user access. Although we have employed measures to protect against unauthorized access of such personal, confidential and proprietary information, as the complexity of information infrastructure continues to grow, the potential risk of security breaches and cyber-attacks increases. Such breaches can lead to shutdowns or system interruptions, and potential unauthorized disclosure of sensitive or confidential information which may result in potentially costly litigation. If any person, including any of our employees, penetrates our network security or otherwise mismanages or misappropriates sensitive or confidential client or customer data, we could be subject to significant fines for violating privacy or data protection and consumer laws or lawsuits from our clients or their customers for breaching contractual confidentiality provisions which could result in negative publicity, legal liability, loss of clients and damage to

 

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our reputation. We may be liable for any misappropriation of customers’ personal information which could also harm our relationship with our clients, and/or cause us to suffer financial losses and/or reputational harm. We may also be liable for damages in the case of such a security or network breach that results in an unauthorized or impermissible disclosure of client or customer data and information. Moreover, our insurance coverage for breaches or mismanagement of such data may not be sufficient to cover one or more large claims against us and our insurers may disclaim coverage as to any future claims.

Under data protection and personal information laws, we are typically required to manage, utilize and store sensitive or confidential client and customer data in connection with the services we provide. In Singapore, under the Personal Data Protection Act 2012, No. 26 of 2012 of Singapore, we are also required to, among others, notify individuals of: the purposes for the collection, use or disclosure of their personal data prior to such collection, use or disclosure and obtain the consent of individuals for any collection, use or disclosure of their personal data. In the People’s Republic of China (the “PRC”), the PRC Personal Information Protection Law (the “PRC PIPL”), promulgated on August 20, 2021 and taking effect on November 1, 2021, requires us to notify and obtain consents prior to collection, storage, use, processing, transmission, provision, disclosure, or deletion of personal information (being all kinds of information related to identified or identifiable individuals) and to provide individuals with the right to withdraw their consent and to access, copy and correct their own personal information. The PRC PIPL also imposes various baseline obligations on personal data processors in connection with permitted uses of, accountability for, the protection of, the retention of, and overseas transfers of, personal data. In addition, under the European General Data Protection Regulation that took effect in May 2018, we must obtain consent and/or offer new controls to existing and new users in Europe before processing data for certain aspects of our service and are also subject to various regulations, including those that govern the storage and transfer of personal data.

Furthermore, we are subject to local data protection laws, consumer laws and/or “do not call list” regulations in most of the countries in which we operate, all of which may require us to make additional expenditures to ensure compliance with these regulations or future additional regulations. We also believe that we will be subject to additional such laws and regulations in the future that may be stricter than those currently in force. Although we take extensive efforts to comply with such applicable laws and regulations, failure or perceived failure by us to comply with rapidly evolving privacy and security laws, policies (including our own policies, which we may update from time to time), legal obligations or industry standards may result in governmental enforcement actions, litigation, fines and penalties or adverse publicity, could require us or our clients to change our or their business practices and could cause our clients to lose trust in us.

We seek to implement measures to protect sensitive and confidential client and customer data in accordance with client contracts and data protection laws and consumer laws. If any person, including any of our employees, penetrates our network security or otherwise mismanages or misappropriates sensitive or confidential client or customer data, we could be subject to significant fines for violating privacy or data protection and consumer laws or lawsuits from our clients or their customers for breaching contractual confidentiality provisions which could result in negative publicity, legal liability, loss of clients and damage to our reputation. We may be liable for any misappropriation of customers’ personal information which could also harm our relationship with our clients, and/or cause us to suffer financial losses and/or reputational harm.

We may also be subject to laws and regulations that restrict the flow of personal data across countries; such laws may constrain our activities and have an adverse impact on our business. Laws and regulations that impact our business, and particularly laws, regulations and other measures governments may take based on privacy and data protection concerns, are increasing in complexity, change frequently and at times conflict among the various jurisdictions where we do business. For instance, recent legal developments in Europe have created complexity and uncertainty regarding overseas transfers of personal data outside of the European Economic Area. In addition, on July 10, 2021, the Cyberspace Administration of the PRC (the “CAC”), published a draft amendment to the Cybersecurity Review Measures (the “Draft Amendment”) for public comments. Pursuant to the Draft Amendment, if any critical information infrastructure operator possesses personal information of more

 

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than one million Chinese users, it needs to file with the CAC for a cybersecurity review prior to the listing of its securities in any foreign stock exchange. When the Draft Amendment will be enacted, whether this requirement will maintain in the final effective version, and to what extent, if at all, this requirement applies to us, is unclear. However, if the cybersecurity review requirement will apply to us, we cannot guarantee we will be able to obtain the approval or if there will be any other impact on our operation.

We may also be liable for damages in the case of such a security or network breach that results in an unauthorized or impermissible disclosure of client or customer data and information. Moreover, our insurance coverage for breaches or mismanagement of such data may not be sufficient to cover one or more large claims against us and our insurers may disclaim coverage as to any future claims. Any of the foregoing could adversely affect our business, financial condition and results of operations.

Our inability to protect our systems and data from continually evolving cybersecurity risks or other technological risks could affect our reputation among our clients and their customers and may expose us to liability.

In conducting our business, we process, transmit sensitive business information and personal information about our clients, their customers and other parties. We have certain responsibilities to card networks and their member financial institutions for any failure, including the failure of our associated third parties, to protect this information.

We have been a target of malicious third-party attempts to identify and exploit system vulnerabilities and penetrate or bypass our security measures in order to gain unauthorized access to our networks and systems or those of our associated third parties. A successful attempt could lead to the compromise of sensitive, business, personal or confidential information. As a result, we proactively employ multiple barriers and controls at different layers of our systems to defend our systems against intrusion and attack and to protect the data we collect. However, we cannot be certain that these measures will continue to successfully counter all current and emerging technology threats that are designed to breach our systems in order to gain access to confidential information. We also rely on third party vendors for aspects of our cybersecurity strategy, such as to conduct security reviews and penetration tests, and there can be no assurance that the tests conducted by these vendors, or measures we take in response to such tests, will be effective at identifying or preventing any cybersecurity threat.

Our computer systems and the computer systems of our clients, which we rely on, could be in the future subject to breach, and our data protection measures may not prevent unauthorized access. The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and are often difficult to detect. Threats to our systems and our associated third parties’ systems can derive from human error, fraud or malice on the part of employees or third parties, or may result from accidental technological failure. Computer viruses and other malware can be distributed and could infiltrate our systems or those of our associated third parties. In addition, denial of service or other attacks could be launched against us for a variety of purposes, including to interfere with our services or create a diversion for other malicious activities. Our defensive measures may not prevent downtime, unauthorized access or use of sensitive data. While we maintain cyber errors and omissions insurance coverage that may cover certain aspects of cyber risks, our insurance coverage may be insufficient to cover all losses. Further, while we carefully select third parties with which we associate, we do not control their actions. Any problems experienced by these third parties, including those resulting from breakdowns or other disruptions in the services provided by such parties or cyber-attacks and security breaches, could adversely affect our ability to service our clients or their customers or otherwise conduct our business.

We could also be subject to liability for claims relating to misuse of personal information, such as unauthorized marketing purposes and violation of data privacy laws. We cannot provide assurance that the contractual requirements related to security and privacy that we impose on our employees who have access to client and customer data will be followed or will be adequate to prevent the unauthorized use or disclosure of data. In addition, we have agreed in certain agreements to take certain protective measures to ensure the confidentiality of

 

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client and customer data. Our clients are located in numerous jurisdictions around the world, and our clients may ask for broad undertaking from us pursuant to the privacy laws applicable to them and may decide not to do business with us if we do not agree to their privacy terms. Furthermore, the costs of systems and procedures associated with any protective measures that we are required to take by our clients may increase and could adversely affect our ability to compete effectively. Any failure to adequately enforce or provide these protective measures could result in liability, protracted and costly litigation, governmental and card network intervention and fines and, with respect to misuse of our clients’ and customers’ information, lost revenue and reputational harm.

Any type of security breach, attack or misuse of data described above or otherwise, whether experienced by us or an associated third party, could harm our reputation and deter existing and prospective clients from using our services or from making electronic payments generally, increase our operating expenses in order to contain and remediate the incident, expose us to unbudgeted or uninsured liability, disrupt our operations (including potential service interruptions), distract our management, increase our risk of regulatory scrutiny, result in the imposition of penalties and fines under state, federal and foreign laws. If we were to be removed from networks’ lists of Payment Card Industry Data Security Standard (PCI DSS) compliant service providers, our existing clients or other third parties may cease using our services. Also, prospective clients may choose to terminate their relationship with us, or delay or choose not to consider us. Any of the foregoing could adversely affect our business, financial condition and results of operations.

We may be unable to obtain future financing on favorable terms, or at all, to fund expected capital expenditure, potential opportunistic acquisitions and working capital requirements.

Our industry is characterized by high working capital requirements primarily relating to new investments in operating sites and employee resources to meet the requirements of our clients. We incur significant start-up costs related to investments in infrastructure to provide our services, including costs of establishing our delivery centers in accordance with our clients’ preferred specifications and hiring and training of employees, with such expenses being historically incurred before revenue is generated. There are also often additional start-up costs associated with entering new geographic markets, including expenses for establishing new operational centers as we grow our business and developing the infrastructure for engagements with clients in these new geographies.

We may, at some stage in the future, require funding for capital expenditures, potential opportunistic, strategic acquisitions or working capital. Our sources of additional funding, if required, may include the incurrence of debt or the issue of equity or debt securities or a combination of both. If we decide to raise additional funds through the incurrence of debt, our interest and debt repayment obligations will increase, and this could have a significant effect on our profitability and cash flows and we may be subject to additional covenants that could affect our business. Furthermore, in the event that we do decide to incur additional debt in the future, there can be no assurance that we will be successful in securing such additional financing on commercially reasonable terms, or at all. Any failure to obtain debt financing in the future could limit our ability to implement our growth strategy and could limit our ability to access cash flows from operations.

Any of the foregoing could have an adverse effect on our business, financial condition and results of operations.

We may be adversely affected by any failure to grow or protect our brand.

We believe the “TDCX” brand name and our reputation are important corporate assets that help distinguish our services from those of our competitors and contribute to our efforts in recruiting and retaining talented personnel.

In November 2019, we rebranded ourselves as “TDCX” and began providing services using our “TDCX” trademark. There are trademark registrations in eleven jurisdictions in the name of TDCX Holdings Pte. Ltd.: Singapore, Malaysia, Hong Kong, the Philippines, China, the European Union, the United Kingdom, Japan, India, Colombia, and the Cayman Islands. There are pending applications for trademark registration in three jurisdictions: Thailand, the United States and South Korea. There are also trademark registrations in the name of

 

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a subsidiary in China. While we believe that our prior brand, “Teledirect,” had a positive reputation, we created the “TDCX” brand to more clearly establish our brand identity in our industry. There is a risk that if we fail to establish or grow our brand or if negative information about us adversely affects our brand, even if false, our business could be adversely affected. In particular, damage to our reputation could be difficult and time-consuming to repair, could make potential or existing clients reluctant to select us for new engagements and could materially adversely affect our recruitment and retention efforts. Any failure to grow our brand or damage to our reputation could also reduce the value and effectiveness of the “TDCX” brand name and/or reduce investor confidence in us, and have an adverse effect on our business, financial condition and results of operations.

We may seek to acquire companies in the future and if we cannot find suitable targets or cannot integrate these companies properly into our business after acquiring them, it could adversely affect our business, financial condition and results of operations.

While we have grown organically almost exclusively, we may in the future as part of our global growth strategy pursue acquisitions of complementary businesses in certain geographies or exposure to certain industries, and acquisitions of companies with technologies that we can incorporate into our tailored client solutions. These transactions could be material to our financial condition and results of operations. Additionally, the inability to identify suitable acquisition targets or investments or the inability to complete such transactions may affect our ability to implement our growth strategy. Furthermore, we may not be able to integrate effectively such future acquisitions into our operations or our corporate culture and may not achieve the profitability we expect from such acquisitions. Even if we identify and pursue acquisitions, we may not complete future transactions in a timely manner, on a cost-effective basis, or at all, and we may not realize the expected benefits of any acquisition or investments. Other companies may compete with us for these strategic opportunities.

We also could experience negative effects on our results of operations and financial condition from acquisition-related charges, amortization of intangible assets and asset impairment charges, and other issues that could arise in connection with, or as a result of, the acquisition of the acquired company, including regulatory or compliance issues that could exist for an acquired company or business and potential adverse effects on results of operations through increased costs or otherwise. These effects, individually or in the aggregate, could cause a deterioration of our credit profile and result in reduced availability of credit to us or increased borrowing costs and interest expense in the future. Any such risks relating to future acquisitions could have a material adverse effect on our business, financial condition and results of operations.

Tax matters, including any reduction or withholding of tax benefits and other incentives we receive, new legislation and actions by taxing authorities may have an adverse effect on our operations, effective tax rate and financial condition.

We may not be able to predict our future tax liabilities due to the international nature of our operations, as we are subject to the complex and varying tax laws and rules of several foreign jurisdictions, including, as of the date of this prospectus, certain tax concessions and benefits from such local jurisdictions. For example, our subsidiary in Malaysia was awarded Multimedia Super Corridor status in 2005 by the Ministry of Finance and Ministry of International Trade and Industry Malaysia, which entitled the subsidiary to enjoy tax incentives under Malaysia’s Customized Incentive scheme. The scheme allows partial tax exemption for the subsidiary on the statutory income earned from its core operations for a certain period. However, these benefits expired on January 18, 2020. We have initiated discussions with relevant governmental agency authorities to renew such benefits on a retrospective basis. In the Philippines, we have benefited from an income tax holiday through our registration with the Philippine Economic Zone Authority, or PEZA. Our income tax holiday from PEZA will eventually expire, subject to a limited number of renewals and PEZA’s full discretion. There can be no assurances that our application to extend any of these tax benefit schemes will be approved on a timely basis or at all. Our business, results of operations and financial condition could be adversely affected if tax contingencies are resolved adversely or if we become subject to increased levels of taxation.

 

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We are also subject to income taxes in numerous jurisdictions. Our tax expense and cash tax liability in the future could be adversely affected by numerous factors, including changes in tax laws, regulations, accounting principles or interpretations and the potential adverse outcome of tax examinations and pending tax-related litigation. Changes in the valuation of deferred tax assets and liabilities, which may result from a decline in our profitability or changes in tax rates or legislation, could have a material adverse effect on our tax expense. Certain tax-related judgements or conclusions that we make are based on our interpretation or understanding of tax laws in the countries in which we operate. Therefore, there can be no assurance that we will not undergo tax assessments and/or audits and that such proceedings will not result in further payments for taxes and tax-related costs and expenses for previous tax years, our current tax year, or tax years in the future. We are also subject to periodic tax audits by the relevant authorities in the jurisdictions in which we operate and, as of the date of this prospectus, are subject to ongoing tax audits. As tax exposures can involve technical interpretations of issues, it may require an extended period to resolve tax disputes. Many tax authorities have significant backlogs of other cases that may also result in extended periods to achieve resolution on open issues. The governments of foreign jurisdictions from which we deliver services may assert that we are not in compliance with the terms of any tax concession or benefit we currently receive or decide to change its laws with respect to such concessions and benefits.

Transfer pricing regulations to which we are subject require that any transaction among us and our subsidiaries be on arm’s-length terms. If the applicable tax authorities were to determine that the transactions among us and our subsidiaries do not meet arms’ length criteria, we may incur increased tax liability, including accrued interest and penalties. Such increase on our tax expenses would adversely affect our business, financial condition and results of operations.

Our business depends in part on our capacity to invest in technology as it develops and substantial increases in the costs of technology and telecommunications services that we rely on from third parties that could have a material adverse effect on our business, financial condition, results of operations and prospects.

The outsourced business support services industry is subject to the periodic introduction of new technology, which often can enable us to service our clients more efficiently and cost effectively. Our business is partly linked to our ability to recognize these new technological innovations and to apply these technological innovations to our business by incorporating them into our tailored solutions for our clients. See “Business—Information Technology and Management Information Systems.” If we do not recognize the importance of a particular new technology to our business in a timely manner or are not committed to investing in and developing such new technology and applying these technologies to our business, our current services may be less attractive to existing and potential clients, and we may lose market share to competitors who have recognized these trends and invested in such technology. Certain emerging technologies, such as artificial intelligence, may be disruptive to our industry, and our ability to identify, predict the outcomes of and incorporate disruptive technologies is key to our sustained business success. We will also be required to provide adequately trained personnel to address the increasingly sophisticated and tech savvy clients whose needs are constantly evolving. Furthermore, if we obtain access to an emerging technology through an acquisition, there can be no assurance that we will be successful in integrating that technology into our operations or business. Any such failure to recognize the importance of such technology or a decision not to invest and develop such technology that keeps pace with evolving industry standards and changing client demands could have a material adverse effect on our business, financial condition and results of operations.

Our operating results may fluctuate from one quarter to the next due to client and service mix and other factors.

Our operating results may differ significantly from quarter to quarter and our business may be affected by factors such as client losses, the timing of new contracts and of new product or service offerings, termination of existing contracts, variations in the volume of business from clients due to seasonal trends, the business decisions of our clients regarding the use of our services, start-up costs as we begin new campaigns for current or new clients,

 

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delays or difficulties in expanding our operational facilities or opening new operational facilities, changes to our revenue mix or to our pricing structure or that of our competitors, inaccurate estimates of resources and time required to complete ongoing campaigns, currency fluctuations and general economic conditions. In addition, while our business generally is not seasonal, our results may fluctuate because our clients’ businesses are impacted by seasonal effects that affect their use of our services, such as high travel seasons for our clients in the travel and hospitality industries or the winter holiday shopping season for consumer electronics clients.

In addition, the demand cycle for our services, typically from three to nine months (from the date the contract is entered into until the beginning of the provision of services), and the internal budget and approval processes of our prospective clients, make it difficult to predict the timing and success of new engagements with current or new clients. The demand cycle for a specific campaign depends on the campaign size, complexity and urgency of the client need. Also, we recognize revenue as and when the performance obligations set out in each campaign are satisfied and when the criteria for recognition are achieved. The financial benefit of gaining a new client may not be realized at the intended time due to delays in the implementation of our services or due to an increase in the start-up costs required in building our infrastructure to meet our current or future clients’ specifications with respect to any engagement. These factors may make it difficult for us to prepare accurate internal financial forecasts or replace anticipated revenue that is not received as a result of these delays. Any failure by us to predict and plan demand for our services for any of the foregoing reasons, including due to the effects of seasonality trends in the businesses of the clients, could adversely affect our business, financial condition and results of operations.

If we experience challenges with respect to labor relations, our overall operating costs and profitability could be adversely affected and our reputation could be harmed.

While we believe we have good relations with our employees, any work disruptions or collective labor actions may have an adverse impact on our services. While we do not have collective bargaining arrangements in most of the current jurisdictions in which we operate, our global growth strategy may involve our entrance into geographies where unions and collective bargaining agreements are more prevalent. As of June 30, 2021, only our workforce in Spain was subject to a collective bargaining agreement, namely, the nationwide collective bargaining agreement for all employers and employees in the Spanish telemarketing industry. If labor negotiations are not successful in Spain or any other geography we may enter into, where we become subject to a collective bargaining agreement, or we otherwise fail to maintain good relations with employees in any jurisdiction in which we operate, we could suffer a strike, work stoppage or other form of labor disruption. Any of the foregoing could harm our reputation and adversely affect our business, financial condition and results of operations.

Our business operations are subject to various regulations and changes in these regulations or enforcement thereof, could require us to make additional expenditures, restrict our business operations or expose us to certain costs related to non-compliance with such regulations.

Any changes in the enforcement of, or enactment of additional, regulations or laws in the jurisdictions in which we operate may subject us to additional expenses related to compliance with such laws or regulations or otherwise affect our business and operations. For example, stricter enforcement of the Indian Companies Act between 2015 and 2017 resulted in many Indian companies, including a dormant subsidiary of ours that has since been dissolved, being removed from the register of companies for various forms of corporate inactivity, and the directors of those companies, including our Founder and our current Chief Financial Officer, being disqualified from holding directorships in Indian companies for periods of five years (until October 31, 2021). Although this particular example of regulatory enforcement change has not and is not expected to impact our operations, it serves as an example of unanticipated regulatory risks that we are exposed to. Furthermore, if we are deemed to have violated any regulation or law in a jurisdiction in which we operate and/or where a delivery center is located, then we may be subject to fines and other expenses related to non-compliance thereof. Our business operations must be conducted in accordance with a number of sometimes conflicting government regulations in

 

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the various jurisdictions in which we operate, including consumer laws, as well as trade restrictions and sanctions, tariffs and labor relations. We are also subject to work permit, visa and immigration and other laws, regulations and requirements with respect to our employees in the countries in which we operate. We have in the past failed to comply with and may in the future fail to comply with such laws and regulations due to timing constraints and other reasons, which could subject us and our officers, directors and employees to liability and otherwise adversely impact our business. Any of the foregoing risks could have an adverse effect on our business, financial condition and results of operations. See also, “Increases in employee salaries and benefits expenses as well as changes to labor laws could affect our business” and “We and our clients are subject to privacy, data protection and information security laws in the jurisdictions in which we and our clients operate.”

Anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing could impair our ability to serve our clients and materially adversely affect our business, results of operations and financial condition.

The practice of outsourcing services to organizations operating in other countries is a topic of political discussion, including in the United States, which is our largest market in terms of location of our clients’ end-customers, as well as other regions in which we have clients or where their customers are located. For example, measures aimed at limiting or restricting outsourcing by U.S. companies may be put forward for consideration by the U.S. Congress and in state legislatures to address concerns over the perceived association between offshore outsourcing and the loss of jobs in the U.S. If any such measure is enacted, our ability to provide services to our clients could be impaired.

In addition, from time to time there has been publicity about purported negative experiences associated with offshore outsourcing, such as alleged domestic job loss and theft and misappropriation of sensitive client or customer data, particularly involving service providers in Asia. Current or prospective clients may elect to perform certain services themselves or may be discouraged from utilizing customer experience solutions providers like us due to negative perceptions that may be associated with us, our business model or our industry. Any slowdown or reversal of existing industry trends toward utilizing customer experience solutions providers would seriously harm our ability to compete effectively with competitors that provide the majority of their services from within the country in which our clients operate.

Our project start-up and implementation cycles require significant resource commitments.

From our initial business development engagement for a prospective project with either a new or existing client to our operational performance with respect to such a project, we are often required to invest significant capital, resources and time. Before committing to use our services for any specific new project, potential or current clients require us to expend substantial time and resources educating them as to the value proposition of our platform and assessing the feasibility of integrating our people, systems and processes with their operations. Our clients then evaluate our services before deciding whether to use them and, if they do decide to enter into an arrangement with us, we would then negotiate the requisite documentation, implement their specifications in our tailored solution (including establishing our delivery centers to our clients’ preferred specifications) and train our team leaders and other personnel that will be dedicated to the project. Therefore, our business prospecting and closure cycle, which generally ranges from six to 12 months, is subject to many risks and delays over which we have little or no control, including our clients’ decision to choose alternatives to our services (such as other providers or in-house offshore resources), the timing of our clients’ budget cycles and approval processes and the fluidity of our clients’ requirements and specifications for a given engagement. For further information related to risks from competition, see “—We operate in a highly competitive environment, and any failure to compete effectively against current and future competitors could adversely affect our revenue and profitability.”

Implementing our services involves a significant commitment of resources over an extended period of time from both our clients and us. The period in which we train the personnel that will be dedicated to any specific client project generally ranges from two weeks to over two months. Our clients may also experience delays in obtaining

 

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internal approvals or delays associated with technology or system implementations, thereby further delaying the implementation process. Our current and future clients may not be willing or able to invest the time and resources necessary to implement our services, and we may fail to enter into arrangements for our services with potential clients to which we have devoted significant time and resources, which could have an adverse effect on our business, financial condition and results of operations.

While managing our growth, we may have difficulty updating our internal operational and financial systems as well as our existing internal accounting, financial and cost control systems.

Since our founding in 1995, and particularly from 2012, we have experienced rapid growth and significantly expanded our operations in key regions and client industries, especially with our clients involved in innovative businesses engaged in the new economy. For years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, our number of agents was 4,608, 7,213, 9,128, 7,473 and 10,020, respectively. In the years ended December 31, 2018, 2019 and 2020 and in the six months ended June 30, 2020 and 2021, we generated revenue of S$181.2 million, S$330.3 million, S$434.7 million, S$209.3 million and S$251.6 million, respectively.

The rapid growth which we have experienced requires us to constantly monitor, evaluate and, if appropriate, reallocate our management and financial and operational resources. In order to manage growth effectively, we must recruit new employees, including employees in middle-management positions such as team leader roles, and implement and improve operational systems, procedures and internal controls on a timely basis.

In addition, we need to update our existing internal accounting, financial and cost control systems to ensure that we can access all necessary financial information in line with the increasing demands of our business. Any internal and disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of the control system are met. The design of a control system must consider the benefits of controls relative to their costs. Inherent limitations within a control system include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by individuals acting alone or in collusion with others to override controls, which may also include controls implemented by our clients. If we are unable to assert that our internal controls over financial reporting are effective now or in the future, or if our auditors are unable to express an opinion on the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports.

If we fail to implement these systems, procedures and controls or update these systems on a timely basis, we may not be able to service our clients’ needs, hire and retain new employees, pursue new business, complete future acquisitions or operate our business effectively. Failure to effectively transfer new client business to our delivery centers, properly budget transfer costs, accurately estimate operational costs associated with new contracts or access financial, accounting or cost control information in a timely fashion could result in delays in executing client contracts, trigger service level penalties or cause our profit margins not to meet our expectations. Any of the foregoing factors could adversely affect our business, financial condition and results of operations.

If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our ADSs may be materially and adversely affected.

Prior to this offering, we were a private company with limited accounting personnel resources. Furthermore, prior to this offering, our management has not performed an assessment of the effectiveness of our internal control over financial reporting, and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud.

 

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Our internal controls relating to financial reporting have not kept pace with the expansion of our business. Our financial reporting function and system of internal controls may be less developed in certain respects than those of similar companies that operate in fewer or more developed markets and may not provide our management with as much or as accurate or timely information. The Public Company Accounting Oversight Board, or PCAOB, has defined a material weakness as “a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis.”

In the course of auditing our consolidated financial statements as of and for the years ended December 31, 2018, 2019 and 2020, we and our independent registered public accounting firm identified three material weaknesses in our internal control over financial reporting as of December 31, 2018, 2019 and 2020, in accordance with the standards established by the Public Company Accounting Oversight Board of the United States. The material weaknesses identified related to (i) inappropriate segregation on several control processes, which includes the review and approval of journal accounting entries; (ii) lack of adequate controls over access rights to several IT systems, which includes excessive and conflicting rights granted to several accounting personnel; and (iii) insufficient financial reporting and accounting personnel with appropriate IFRS knowledge to prepare and review statement of cash flows relating to acquisition transaction in accordance with IFRS. There can be no assurance that any remediation actions we have undertaken will be effective or that other similar issues may not arise in the future.

As a result of the identification of these material weaknesses, we plan to take measures to remedy these control deficiencies. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Internal Control over Financial Reporting.” However, we can give no assurance that our planned remediation will be properly implemented or will be sufficient to eliminate such material weaknesses or that material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future. Our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which may result in volatility in and a decline in the market price of the ADSs.

Upon the completion of this offering, we will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ending December 31, 2021. In addition, if we cease to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting on an annual basis. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Generally speaking, if we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely

 

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cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud, misuse of corporate assets and legal actions under securities laws and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.

Our ability to provide our services depends in part upon the quality and reliability of the facilities and equipment provided by our technology, digital services and telecommunications providers, our reliance on a limited number of suppliers of such technology and the services and products of our clients.

The success of our business depends in part on our ability to provide high quality and reliable services, which in part depends upon the proper functioning of facilities and equipment (including appropriate hardware and software and technological applications) provided by third parties and our reliance on a limited number of suppliers of such technology, and is, therefore, beyond our control. As we lease our facilities from third parties, our ability to provide high quality and reliable services depends, in part, on our ability to maintain existing leases and accurately project our facility capacity requirements. Any early termination of a lease or failure to accurately predict facility requirements may cause us to have to relocate and cause disruptions to our services and business. When we enter new geographies, we often enter into shorter term arrangements with co-working space providers and these arrangements may be subject to more frequent changes or less intermediate term predictability.

We also depend on the telecommunication services provided by local telecommunication companies in the countries in which we operate, and any significant disruptions in these services would adversely affect our business. If these or other third party providers fail to maintain their equipment properly or fail to provide proper services in a timely or reliable manner, our clients may experience service interruptions. If interruptions adversely affect our services or the perceived quality and reliability of our services, we may lose client relationships or be forced to make significant unplanned investments in the purchase of additional equipment from other providers to ensure that we can continue to provide high quality and reliable services to our clients. In addition, if one or more of the limited number of suppliers of our technology cannot deliver or provide us with the requisite technology on a timely basis, our clients could suffer further interruptions. Any such interruptions may have a material adverse effect on our business, financial condition and results of operations.

Our key technology systems and facilities may be damaged in natural disasters such as earthquakes or fires or subject to damage or compromise from human error, technical disruptions, power failure, computer glitches and viruses, telecommunications and digital services failures, adverse weather conditions and other unforeseen events, all of which are beyond our control. Such events may cause disruptions to information systems, electrical power and telephone and digital service for sustained periods. Any significant failure, damage or destruction of our equipment or systems, or any major disruptions to basic infrastructure such as power and telecommunications and digital systems in the locations in which we operate, could impede our ability to provide services to our clients and thus adversely affect their businesses, which may have a negative impact on our reputation and may cause us to incur substantial additional expenses to repair or replace damaged equipment or facilities.

While we currently have property damage and comprehensive general liability insurance in force, our insurance coverage may not be sufficient to compensate for the costs of repairing the damage caused by such disruptive events and such events may not be covered under our policies. With respect to losses which are covered by our policies and subject to deductibles, exclusions, and/or limitations, it may be difficult and time-consuming to recover such losses from insurers. In addition, we may not be able to recover the full amount of losses incurred from the insurers. Prolonged disruption of our services, even if due to events beyond our control could also cause our clients to terminate their contracts with us, which would have a material adverse effect on our business, financial condition and results of operations.

In addition, in some areas of our business, we depend upon the quality and reliability of the services of our clients, which we help to sell to their end-customers. If the services we provide to our clients are disrupted due to

 

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technical difficulties or if there is any disruption to our services based on the foregoing factors, then the result may have an adverse effect on our business, financial condition and results of operations.

In addition, any increases in the cost of telecommunications and digital services and products provided by third parties, including equipment, software, information technology products and related services and workstations have a direct effect on our operating costs. In addition, our clients may impose certain technological requirements or additional requirements beyond those implemented upon the initial project set up that may not be included in our current fee arrangements. In such cases, we may not be compensated for these additional costs and have to absorb such costs. The cost of telecommunications and digital services is subject to a number of factors, including changes in regulations and the market as well as competitive factors such as the concentration and bargaining power of technology and telecommunications and digital services providers and suppliers, most of which are beyond our control or which we cannot predict. The increase in the costs of these essential services and products could have an adverse effect on our business, financial condition and results of operations.

Our debt service requirements and restrictive covenants limit our ability to borrow more money, to make distributions to our shareholders and to engage in other activities.

Our existing credit agreements contain a number of covenants that limit our ability and our subsidiaries’ ability to, among other things, transfer or dispose of assets, pay dividends or make distributions, incur additional indebtedness, create liens, make investments, loans and acquisitions, engage in transactions with affiliates, merge or consolidate with other companies or sell substantially all of our assets. Our credit agreements are guaranteed by us and certain of our subsidiaries and secured by substantially all of our and the assets of our borrower subsidiary and the guarantor subsidiaries. The terms of our credit agreements may restrict our current and future operations and could adversely affect our ability to finance our future operations or capital needs or to execute preferred business strategies. In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy and compete against companies who are not subject to such restrictions. Additionally, our obligations to repay principal and interest on our indebtedness make us vulnerable to economic or market downturns. If we are unable to comply with our payment requirements, our lenders may accelerate our obligations under our credit agreement and foreclose upon the collateral, or we may be forced to sell assets, restructure our indebtedness or seek additional equity capital, which would dilute our shareholders’ interests. Our failure to comply with any covenant could result in an event of default under the agreement and the lenders (or any subsequent lender) could make the entire debt immediately due and payable. If this occurs, we might not be able to repay our debt or borrow sufficient funds to refinance it. Even if new financing is available, it may not be on terms that are acceptable to us. These events could cause us to cease operations. For further details, see “Description of Certain Indebtedness.”

We may face difficulties as we expand our operations into countries in which we have no prior operating experience.

Our growth strategy relies on our global expansion in order to provide geographic breadth for our current and future clients. This may involve expanding into countries and regions other than those in which we currently operate and where we have less familiarity with local regulations, environment and procedures. It involves expanding our operations in recently entered markets such as Latin America, Europe and India, or entering into new countries and regions, such as in Korea and other Chinese regional markets where we do not currently operate, which have different cost structures, labor conditions, regulations and socioeconomic dynamics that may affect our results of operations. As we expand our business into new countries and regions, we may encounter economic, regulatory, personnel, technological and other difficulties that increase our expenses or delay our ability to start up our operations or become profitable in such countries. Any difficulty in the implementation of our global growth strategy may adversely affect our business, financial condition and results of operations.

 

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We are exposed to currency fluctuations in the countries in which we operate against the U.S. dollar and Singapore dollar and any volatility in these currencies could adversely affect our business, financial condition and results of operations.

We earn revenue primarily denominated in U.S. dollars and Singapore dollars (which is our reporting currency). We make rental payments and incur expenses for employee compensation and other operating expenses in the local currencies in the jurisdictions in which we operate. There can be no assurance, however, that we will not take campaigns, in the future, that result in more exposure to local currencies. While inflation may have a lesser effect on the profit and loss of a local subsidiary itself, depreciation of the local currency against the U.S. dollar and/or Singapore dollar would reduce the value of the dividends payable to us from our operating companies. We present our financial results in Singapore dollars and our results of operations would be adversely affected if other currencies (including the U.S. dollar) depreciate significantly against the Singapore dollar. In addition, the majority of our indebtedness, in particular the Credit Suisse Facility, is denominated in U.S. dollars. Furthermore, fluctuations in currency exchange rates may also affect the comparability of our financial results from period to period, as we convert our subsidiaries’ statement of financial position into Singapore dollars from other currencies at the period-end exchange rate, and income and cash flow statements at average exchange rates for the year.

The imposition of barriers to trade or escalation of trade disputes could materially and adversely affect demand for our services.

There has been a global escalation of barriers to trade in recent years, including with respect to the United States and China imposing tariffs and trade barriers on trade with each other. Any imposition of new tariffs or other trade barriers, or the escalation of any trade dispute, may adversely affect the global economy and businesses of our clients, which, in turn, would also adversely affect demand for our services. A downturn in the global economy or the economies of countries in which we or our clients operate as a result of any trade dispute could adversely affect our business, financial condition and results of operations.

In addition, current government actions undertaken by various governments to stimulate their respective economies and future government action, including interest rate decreases, changes in monetary policy or intervention in the exchange markets and other government action to adjust the value of the local currency, may trigger inflation. For example, governmental measures to control inflation may include maintaining a tight monetary policy with high interest rates, thereby restricting the availability of credit and reducing economic growth. As a result, interest rates may fluctuate significantly. Furthermore, losses incurred based on the exchange rate used may be exacerbated if regulatory restrictions are imposed when these currencies are converted into U.S. dollars.

The occurrence of such fluctuations, devaluations or other currency risks could have a material adverse effect on our business, financial condition and results of operations.

The United Kingdom’s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.

The United Kingdom formally withdrew from the European Union on January 31, 2020 and entered into a transition period, which ended on December 31, 2020. While the United Kingdom and the European Union entered into a trade and cooperation agreement that went into effect provisionally from January 1, 2021, significant political and economic uncertainty remains about whether the terms of the relationship will differ materially from the terms before withdrawal, including with respect to any possible trade deals with the European Union and measures related to mobility between the United Kingdom and the European Union.

These developments, or the perception that any of them could occur, have had and may continue to have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain

 

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financial markets or restrict our access to capital. Any of these factors could have a material adverse effect on our business, financial condition and results of operations and reduce the price of our ADSs.

If our current insurance coverage is or becomes insufficient to protect against losses incurred, our business, financial condition, results of operations and prospects may be adversely affected.

We maintain some insurance coverage, including professional liability insurance and property insurance coverage for certain of our facilities and equipment for certain of our operations; however, we do not insure for all risks in our operations. In addition, we intend to maintain some level of self-insurance coverage in the future through the establishment of a captive insurance subsidiary. The reserves of such a captive insurance subsidiary will be subject to periodic adjustments based upon actuarial evaluations, which adjustments could impact our overall results of operations, and such periodic adjustments may be favorable or unfavorable. If any claims for injury are brought against us, or if we experience any business disruption, litigation or natural disaster, we might incur substantial costs and diversion of resources.

We provide services that are integral to our clients’ businesses. If we were to default in the provision of any contractually agreed-upon services, our clients could suffer significant damages and make claims against us for those damages. Although we believe that we maintain sufficient insurance coverage comparable to other service providers in our industry, the occurrence of an event that causes losses in excess of our self-insurance estimates or the limits specified in our policies, or losses arising from events not covered by insurance policies (including any deductibles, exclusions or limitations), could materially harm our business, financial condition, results of operations and prospects. Moreover, we cannot give any assurance that insurance will continue to be available to us on economically reasonable terms or that we would not be required to increase our self-insurance amounts. Additionally, we do not maintain “key person” insurance policies on any of our directors, officers or other personnel. There can be no assurance that any claims filed will be honored fully or timely under our insurance policies. Also, our financial condition may be affected to the extent we suffer any loss or damage that is not covered by insurance or which exceeds our insurance coverage.

Risks Related to Countries Where We Operate

Developments in the social, political, regulatory and economic environment in the countries where we operate, may have a material and adverse impact on us.

Our business, prospects, financial condition and results of operations may be adversely affected by social, political, regulatory and economic developments in countries in which we operate. Such political and economic uncertainties include, but are not limited to, the risks of war, terrorism, nationalism, nullification of contract, changes in interest rates, imposition of capital controls and methods of taxation. For example, we have considerable operations in Singapore, and negative developments in Singapore’s socio-political environment may adversely affect our business, financial condition, results of operations and prospects. Although the overall economic environment in Singapore and other countries where we operate appears to be positive, there can be no assurance that this will continue to prevail in the future.

Disruptions in the international trading environment may seriously decrease our international sales.

The success and profitability of our international activities depend on certain factors beyond our control, such as general economic conditions, labor conditions, political stability, macro-economic regulating measures, tax laws, import and export duties, transportation difficulties, fluctuation of local currency and foreign exchange controls of the countries in which we sell our services, as well as the political and economic relationships among the jurisdictions where we source products and jurisdictions where our clients’ customers are located. As a result, our services will continue to be vulnerable to disruptions in the international trading environment, including adverse changes in foreign government regulations, political unrest and international economic downturns. Any disruptions in the international trading environment may affect the demand for our services, which could impact our business, financial condition and results of operations.

 

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Natural events, wars, terrorist attacks and other acts of violence involving any of the countries in which we or our clients have operations could adversely affect our operations and client confidence.

Natural disaster events (such as volcanos, floods and earthquakes), terrorist attacks and other acts of violence or war may adversely disrupt our operations, lead to economic weakness in the countries in which they occur and affect worldwide financial markets, and could potentially lead to economic recession, which could have an adverse effect on our business, financial condition and results of operations. These events could adversely affect our clients’ levels of business activity and precipitate sudden significant changes in regional and global economic conditions and cycles. These events also pose significant risks to our people and to our business operations around the world.

Our subsidiaries in Thailand are subject to restrictions on foreign ownership of their shares under Thai law.

We have two subsidiaries in Thailand, namely, Teledirect Telecommerce (Thailand) Limited, or TDTH, in which TDCX SG owns 49% and two Thai shareholders own 51%, and Comparexpress Insurance Broker (Thailand) Ltd., or Comparexpress, in which TDTH, TDCX SG and our Founder hold 60%, 39.999% and 0.001%, respectively, of the total share capital. With respect to TDTH, the shareholders have agreed on certain arrangements, whereby (i) TDCX SG provided the Thai shareholders with interest-free loans for the payment for their shares in TDTH; (ii) such shares are pledged in favor of TDCX SG as security for repayment of such loans; (iii) so long as any amount relating to their respective loan remains unpaid, the Thai shareholders must, at TDCX SG’s demand, assign to TDCX SG or its designee all of their voting rights pertaining to such shares in respect of any meeting of shareholders; and (iv) the Thai shareholders shall, upon notice from TDCX SG, sell and transfer such shares to TDCX SG or its designee. In addition, pursuant to the articles of association of TDTH, if and to the extent that it declares dividends, the Thai shareholders, as holders of preference shares, are entitled to receive preferential dividends in an amount of 10% of the par value of those preference shares (such par value being 100 Thai baht per preference share) before distribution of any dividends to the holders of ordinary shares.

Pursuant to the Thai Foreign Business Act B.E. 2542 (1999), or the FBA, a person or entity that is “Non-Thai” (as defined in the FBA and described in “Regulatory Environment — Thailand”) cannot conduct certain restricted businesses in Thailand, including the businesses that our subsidiaries in Thailand operate, unless an appropriate license is obtained. As our subsidiaries in Thailand are more than 50% owned by Thai persons or entities, our Thai subsidiaries are not required by the FBA to obtain the license prescribed thereunder. Under the FBA, it is also unlawful for a Thai national or entity to hold shares in a Thai company as a nominee for or on behalf of a foreigner in order to circumvent the foreign ownership restrictions. While there are no prescribed requirements or criteria under the FBA or promulgated by the Ministry of Commerce of Thailand for determining whether a Thai national or entity is holding shares in a Thai company with his or her own genuine investment intent or as a nominee for or on behalf of a foreigner, the investigation manual published in 2015 by the Department of Special Investigation, a government authority which is authorized to conduct investigations on potential violations of the FBA, indicates that the following factors, will be taken into account in an investigation: (i) the intention of the parties, (ii) the source of funds of both shareholders and the company and source of the company’s working capital, (iii) the shareholding structure, types of shares, voting rights and control of the Thai and foreign shareholders in the Thai company and (iv) the distribution of dividends by the Thai company to the Thai and foreign shareholders.

In addition, the Civil and Commercial Code of Thailand (as amended) requires a private company to have a minimum number of three shareholders. Failure to comply with such minimum shareholder requirement are grounds on which a Thai court could order dissolution of the company.

Our Thai counsel, Thanathip & Partners Legal Counsellors Limited, is of the opinion that the ownership structure of each of our Thai subsidiaries is in compliance with the FBA based on, among other things, the fact that a majority of the share capital of each Thai subsidiary is held by Thai nationals or entities for their own benefit. The opinion of Thanathip & Partners Legal Counsellors Limited is filed as an exhibit to the registration statement of which this prospectus forms a part. There can be no assurance that the Ministry of Commerce of Thailand will

 

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not interpret the FBA or evaluate the shareholding structures or shareholding arrangements of our Thai subsidiaries differently and hence reach a different conclusion, which could lead to an action being brought in the Thai court. In the event of such action and if the Thai court determines that the ownership structure of any of our subsidiaries in Thailand for any reason constitute an illegal nominee arrangement, it may order sanctions, which may include criminal sanctions against us and the Thai shareholders of such subsidiaries in Thailand, and such subsidiaries may be ordered to cease operations in Thailand. If the ownership structure of our Thai subsidiaries is found to be invalid, existing arrangements permit TDCX SG to repurchase the relevant shareholder’s shares in order to sell them to a suitable third party or take other steps to comply with the FBA. Under such circumstances and despite potential sanctions with respect to past non-compliance, we would inform the Ministry of our intent and efforts to remedy any determination of non-compliance and seek possible relief from sanctions with an aim at enabling each of our Thai subsidiaries to continue its business operations going forward. There can be no assurance that the Ministry would grant us such relief or that we would be able to complete any sales of shares to a suitable third party in a timely manner.

If the PRC government deems that Agorae Beijing’s contractual arrangements do not comply with PRC regulatory restrictions on foreign investment or VATS License requirements, we could be subject to adverse consequences.

Agorae Beijing, our wholly owned subsidiary incorporated in the PRC, provides consulting services to Beijing Rongma Tiancheng Information Technology Co. Ltd., or RMTC, a third party domestically owned PRC company with relevant PRC call center licenses, to support RMTC’s provision of call center services to customers in China. Agorae Beijing’s arrangements with RMTC include a revenue sharing agreement, pursuant to which substantially all of the proceeds from operations of RMTC are received by us.

Under the Foreign Investment Law of the People’s Republic of China, or the PRC Foreign Investment Law, which came into effect as of January 1, 2020, businesses operating in industries on the “negative list” are subject to restrictions on foreign ownership. Call center services are a sub-segment of the value-added telecommunications sector, which was included on the negative list until July 2019 (pursuant to the Special Management Measures for the Market Entry of Foreign Investment (Negative List) (2018 Version) and its previous versions). As a result, prior to July 2019, a foreign owned entity, such as Agorae Beijing, could provide call center services in the PRC only through a joint venture with a PRC partner, and the foreign entity was able to hold no more than 50% of the equity in the joint venture. This restriction has been lifted pursuant to the Special Management Measures for the Market Entry of Foreign Investment (Negative List) (2019 Version) which came into effect on July 30, 2019. The Telecommunication Regulation of the People’s Republic of China, or the PRC Telecommunication Regulation, which was enacted on September 25, 2000 and amended on July 29, 2014 and February 6, 2016, and the Measures on Administration of Licensing for Telecommunication Operation, or Measures on Administration of Licensing for Telecommunication Operation, which came into effect as of September 1, 2017, require that a call center operator in the value-added telecommunications industry obtain a value-added telecommunication service license, or VATS License. Although the restriction on foreign shareholding in call center services businesses has now been lifted, the national implementation rules on how a foreign owned entity can apply for the VATS License have not been promulgated, and it is unclear whether or when the national implementation rules will be enacted.

Agorae Beijing, notwithstanding its arrangements with RMTC, could be deemed to be engaging in a call center business in the PRC in contravention of the negative list and relevant regulations and be required to obtain a VATS License. In such circumstances, the PRC Ministry of Industry and Information Technology (or its local counterparts) could impose sanctions against Agorae Beijing for engaging in a call center business without obtaining a VATS License, including confiscating illegal income, imposing a penalty of three to five times of the entity’s illegal income, ordering the entity to suspend its operations, invalidating relevant agreements and prohibiting the entity from obtaining a VATS License in the future. In addition, historical practices in contravention of relevant rules might have an adverse impact on our ability to obtain a VATS License in the future through Agorae Beijing. While TDCX Shanghai, our another wholly owned subsidiary incorporated in the

 

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PRC, has obtained a VATS License, the coverage of this license is limited to the Shanghai Free Trade Zone and does not include the business of Agorae Beijing. There can be no assurances that Agorae Beijing would be able to obtain a VATS License if we decided to apply for such a license or that, if we were able to obtain such a license, that we would not incur transition expenses and/or be able to directly hire employees on commercially reasonable terms or at all. Any of the foregoing could have an adverse effect on our business, financial condition, results of operations, prospects and reputation.

Risks Relating to Investments in Cayman Companies

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law, we conduct substantially all of our operations and all of our directors and executive officers reside outside of the United States.

We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association, the Companies Act (As Revised), as amended from time to time, of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than the memorandum and articles of association, the register of mortgages and charges and special resolutions of the shareholders) or to obtain copies of lists of shareholders of these companies. Our directors have discretion under our articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent we choose to follow home country practice with respect to corporate governance matters, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

Certain judgments obtained against us by our shareholders may not be enforceable.

We are a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. Most of our current operations are conducted in Asia. In addition, our current directors and executive officers are not United States nationals or residents. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or

 

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against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the jurisdictions that comprise the Asia region may render you unable to enforce a judgment against us, our assets, our directors and executive officers or the assets of our directors and executive officers. For more information regarding the relevant laws of the Cayman Islands and the Asia markets, see “Enforceability of Civil Liabilities.”

Risks Relating to our Initial Public Offering and the ADSs

Our Founder, Executive Chairman and Chief Executive Officer, Mr. Laurent Junique, has considerable influence over important shareholder matters due to his significant voting power over our shares. Our dual-class voting structure will, among other things, limit Class A ordinary shareholders’ ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares may view as beneficial.

Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. The rights of the holders of Class A ordinary shares and Class B ordinary shares are different only with respect to voting, conversion and transfer rights. Holders of Class A ordinary shares are entitled to one vote per share in respect of matters requiring the votes of shareholders, while holders of Class B ordinary shares are entitled to ten votes per share, subject to certain exceptions. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of any Class B ordinary share by a shareholder to any person who is not an affiliate of such shareholder, or upon a change of ultimate beneficial ownership of any Class B ordinary share to any person who is not an affiliate of the registered shareholder of such Class B ordinary share, such Class B ordinary share will automatically and immediately convert into one Class A ordinary share. Each of our Class B ordinary shares is convertible into one Class A ordinary share at any time and will convert automatically upon the earlier of (i) the date that is 15 years from the date of effectiveness of the registration statement of which this prospectus forms a part or (ii) nine months after the death or permanent disability of Mr. Junique. Due to the disparate voting powers associated with our two classes of ordinary shares, Mr. Junique will hold approximately 98.5% of the aggregate voting power of our Company immediately following the completion of this offering (assuming no exercise by the underwriters of their option to purchase additional ADSs in full). As a result, Mr. Junique has considerable influence over matters such as electing or removing directors, approving any amendments to our constitution and approving material mergers, acquisitions or other business combination transactions. Furthermore, Mr. Junique has no obligation to guarantee our debt in the future and it may not be in his interest to do so. If Mr. Junique decides not to guarantee any future debt of the Company, it may adversely affect our ability to incur debt, or the terms of any debt we incur, in the future.

For the foreseeable future, investors in this offering and holders of our Class A ordinary shares and ADSs will not have a meaningful voice in our corporate affairs and that the control of our Company will be concentrated with Laurent Junique. This concentrated control will, among other things, limit your ability to influence corporate matters and could also discourage others from pursuing any potential merger, takeover or other change of control transactions, which could have the effect of depriving the holders of our Class A ordinary shares and ADSs of the opportunity to sell their shares at a premium over the prevailing market price. For a description of the dual-class structure, see “Description of Share Capital.”

An active trading market for the ADSs may not develop, and you may not be able to sell your ADSs at or above the offering price.

Prior to the completion of this offering, there has been no public market for the ADSs or our Class A ordinary shares. An active trading market for the ADSs may never develop or be sustained following this offering. If an active trading market does not develop, you may have difficulty selling your ADSs at an attractive price, or at all. The price for the ADSs in this offering will be determined by negotiations among us and representatives of the

 

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underwriters, and it may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell the ADSs at or above the offering price or at any other price or at the time that you would like to sell. An inactive market may also impair our ability to raise capital by selling the ADSs, and it may impair our ability to attract and motivate our personnel through equity incentive awards.

The trading price of the ADSs may be volatile in the future.

The ADSs may trade at prices significantly below the offering price and the price of the ADSs after this offering may fluctuate widely, depending on many factors, including:

 

   

variations in our results of operations;

 

   

perceived prospects for our business and operations and for omnichannel CX solutions and business services in general, differences between our actual financial and operating results and those expected by investors and analysts;

 

   

business or prospects of our clients and specifically new economy companies;

 

   

changes in analysts’ recommendations or perceptions;

 

   

changes in conditions affecting the outsourced business support services industry;

 

   

changes in market valuations and share prices of publicly listed companies with businesses similar to us;

 

   

broad stock market price fluctuations;

 

   

changes in general economic conditions;

 

   

the announcement of acquisitions by us, our clients or our competitors;

 

   

passage of legislation or changes in regulations;

 

   

the addition or departure of key personnel;

 

   

actions taken by our shareholders;

 

   

competition;

 

   

negative publicity about us, our shareholders, affiliates, directors, officers or employees, our content offerings, our business model, our services or our industry;

 

   

release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities;

 

   

potential litigation or regulatory investigations; or

 

   

other developments affecting us, our clients or our competitors.

Furthermore, in recent years, the stock market has experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our and related industries. The volatility frequently appears to occur without regard to the operating performance of the affected companies. As a result, the price of the ADSs could fluctuate based upon factors that have little or nothing to do with us, and these fluctuations could materially reduce our share price.

Future sales of the ADSs, the Class A ordinary shares or our other equity securities, and the availability of a large number of such securities for sale, could depress the price of the ADSs.

The sale of a significant number of the ADSs, Class A ordinary shares or our other equity securities in the public market after this offering, or the perception that such sales may occur, could materially and adversely affect the market price of the ADSs. These factors could also materially impair our ability to raise capital through equity

 

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offerings in the future. See “Shares Eligible for Future Sale” for a discussion of possible future sales of the ADSs.

Upon completion of this offering, we will have 18,772,000 ADSs outstanding (representing 18,772,000 Class A ordinary shares), assuming no exercise by the underwriters of their option to purchase additional ADSs. The ADSs sold in this offering will be freely tradable without restriction under the Securities Act, except for any shares purchased by any of our existing “affiliates,” as that term is defined in Rule 144 under the Securities Act. Shares held by our existing shareholders may also be sold in the public market in the future, subject to the restrictions in Rule 144 and Rule 701 under the Securities Act and the applicable lock-up agreements. Although our executive officers, directors, our Principal Shareholder and certain holders of our capital stock, who will hold in aggregate Class A ordinary shares and Class B ordinary shares representing 86.8% of our issued share capital immediately following the completion of this offering (assuming no exercise by the underwriters of their option to purchase additional ADSs shares), will be subject to a lock-up, any substantial sale or perceived substantial sale of the ADSs, Class A ordinary shares or the Class B ordinary shares over a short period of time after the expiration of the lock-up period could cause the price of the ADSs to fall. In addition, certain representatives of the underwriters, on behalf of the underwriters, may release all or some portion of the shares subject to the lock-up agreements prior to the expiration of the lock-up period.

Similar sales of Class A ordinary shares or Class B ordinary shares by holders after vesting of awards or holders of options who have exercised their options under any incentive plan that we intend to implement could also cause the price of the Class A ordinary shares to fall.

You will experience substantial dilution as a result of this offering and future equity issuances.

Purchasers of the ADSs will experience immediate and substantial dilution. After giving effect to the sale of the ADSs offered by this prospectus (assuming no exercise by the underwriters of their option to purchase additional ADSs), and after deducting the underwriting discounts and commissions and the estimated offering expenses payable by us in this offering, our net tangible book value as of June 30, 2021, would have been US$222.5 million, or US$1.56 per share. This represents an immediate dilution of US$15.44 per share to investors in this offering, based on an assumed offering price of US$17.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus. For a calculation of the dilution purchasers in this offering will incur, see “Dilution.”

In addition, on August 26, 2021, we adopted the TDCX Performance Share Plan (the “PSP”), which allows us to offer Class A ordinary shares or ADSs to our employees, officers, executive directors and consultants. Pursuant to the PSP, the aggregate nominal number of shares over which our board of directors may award is 5.0% of our total issued and outstanding shares on a fully diluted as-converted basis, which is 7,113,600 shares immediately following the offering (assuming no exercise by the underwriters of their option to purchase additional ADSs). In addition, following the closing of the offering, we expect to award, subject to the approval of our board of directors, up to approximately 1,815,000 Class A ordinary shares to certain of our directors, officers and other senior employees under the terms of our PSP. We may also implement other employee equity participation programs, such as employee stock option programs.

Pursuant to our arrangements with Airbnb, we are currently in the process of negotiating with Airbnb the potential issuance of warrants to acquire some of our ordinary shares. While there has been no agreement to date on the terms and conditions of such warrants, including with respect to pricing, number of shares subject to issuance, strike-price or expiration, the grant of warrants to Airbnb, if exercised, will cause immediate dilution to our shareholders, and if we issue such warrants with an exercise price less than the price of our ADS pursuant to this offering (or the ADS price paid by future purchasers of our ADSs), such holders of our ADSs will experience immediate economic dilution upon the exercise of such warrants.

If we issue additional equity securities, whether pursuant the warrants issued to Airbnb, the PSP or for any other reason, you will experience additional dilution and our earnings per share will be reduced. In addition, any sales in the public market of any common shares issuable upon the exercise of a warrant could adversely affect the market price of our equity shares or ADS.

 

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Our future earnings could be adversely impacted by any warrants that may be granted to Airbnb.

It is possible that any warrants that may be issued to Airbnb will be presented as a liability in our audited consolidated balance sheet and be subject to fair value measurement adjustments during the periods that it is outstanding. Accordingly, in such a case, future fluctuations in the fair value of the warrant could adversely impact our results of operations.

 

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We have broad discretion in the use of the net proceeds received by us from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds received by us from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of the ADSs and our Class A ordinary shares. Although we have not yet determined with certainty the manner and specific amounts in which we will allocate the net proceeds of this offering, we expect to use the net proceeds from this offering to repay amounts outstanding under the Credit Suisse Facility, and the remaining to enable us to expand our business into new markets, for working capital, to fund growth and for other general corporate purposes, which may include future acquisitions and potential repayment of other indebtedness. However, our use of these proceeds may differ substantially from our current plans. The failure by our management to apply these funds effectively could result in financial losses that could adversely affect our business and cause the price of our ADSs to decline. Pending their use, we may invest the net proceeds received by us from this offering in a manner that does not produce income or that loses value.

The depositary for the ADSs will give us a discretionary proxy to vote our ordinary shares underlying your ADSs at shareholders’ meetings if you do not give voting instructions to the depositary, except in limited circumstances, which could adversely affect your interests.

Under the deposit agreement for the ADSs, the depositary will give us a discretionary proxy to vote our ordinary shares underlying your ADSs at shareholders’ meetings if you do not give voting instructions to the depositary, unless:

 

   

we have failed to timely provide the depositary with our notice of meeting and related voting materials;

 

   

we have instructed the depositary that we do not wish a discretionary proxy to be given;

 

   

we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting;

 

   

a matter to be voted on at the meeting would have a material adverse impact on shareholders; or

 

   

voting at the meeting is made on a show of hands.

The effect of this discretionary proxy is that, if you fail to give voting instructions to the depositary, you cannot prevent our ordinary shares underlying your ADSs from being voted, absent the situations described above, and it may make it more difficult for shareholders to influence our management. Holders of our ordinary shares are not subject to this discretionary proxy.

The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to vote your ordinary shares.

As a holder of ADSs, you will only be able to exercise the voting rights with respect to the underlying ordinary shares represented by your ADSs in accordance with the provisions of the deposit agreement. You may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise your right to vote. Under the deposit agreement, you must vote by giving voting instructions to the depositary. If we ask for your instructions, then upon receipt of your voting instructions, the depositary will try to vote the underlying ordinary shares represented by your ADSs in accordance with these instructions. If we do not instruct the depositary to ask for your instructions, the depositary may still vote in accordance with instructions you give, but it is not required to do so. You will not be able to directly exercise your right to vote with respect to the underlying ordinary shares represented by your ADSs unless you withdraw the underlying ordinary shares represented by your ADSs from the depositary and become a registered holder of such ordinary shares. When a general meeting is convened, you may not receive sufficient advance notice to withdraw the underlying ordinary shares represented by your ADSs to allow you to vote with respect to any specific matter. If we ask for your instructions, the depositary will notify you of the upcoming vote and will arrange to deliver our

 

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voting materials to you. We have agreed to give the depositary prior notice of shareholder meetings as far in advance of the meeting date as practicable. Nevertheless, we cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the ordinary shares underlying your ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise your right to vote and you may have no legal remedy if the underlying ordinary shares represented by your ADSs are not voted as you requested.

You may be subject to limitations on the transfer of your ADSs.

Your ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems expedient in connection with the performance of its duties. The depositary may close its books from time to time for a number of reasons, including in connection with corporate events such as a rights offering, during which time the depositary needs to maintain an exact number of ADSs on its books for a specified period. The depositary may also close its books in emergencies, and on weekends and public holidays. The depositary may refuse to deliver, transfer or register transfers of ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

Forum selection provisions in our post-offering memorandum and articles of association and our deposit agreement with the depositary bank could limit the ability of holders of our Class A ordinary shares, ADSs or other securities to obtain a favorable judicial forum for disputes with us, our directors and officers, the depositary bank, and potentially others.

Our post-offering memorandum and articles of association provide that the United States District Court for the Southern District of New York is the exclusive forum within the United States for the resolution of any complaint asserting a cause of action arising out of or relating in any way to the federal securities laws of the United States, regardless of whether such legal suit, action, or proceeding also involves parties other than our company. Our deposit agreement provides that the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) shall have exclusive jurisdiction over any suit, action or proceeding against or involving us or the depositary, arising out of or relating in any way to the deposit agreement or the transactions contemplated thereby or by virtue of owning the ADSs or ADRs. However, the enforceability of similar federal court choice of forum provisions in other companies’ organizational documents has been challenged in legal proceedings in the United States, and it is possible that a court could find this type of provision to be inapplicable, unenforceable, or inconsistent with other documents that are relevant to the filing of such lawsuits. If a court were to find the federal choice of forum provision contained in our post-offering memorandum and articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions. If upheld, the forum selection clause in our post-offering memorandum and articles of association, as well as the forum selection provision in the deposit agreement, may limit a security-holder’s ability to bring a claim against us, our directors and officers, the depositary bank, and potentially others in his or her preferred judicial forum, and this limitation may discourage such lawsuits. In addition, the Securities Act provides that both federal and state courts have jurisdiction over suits brought to enforce any duty or liability under the Securities Act or the rules and regulations thereunder. Accepting or consent to this forum selection provision does not represent you are waiving compliance with federal securities laws and the rules and regulations thereunder. The exclusive forum provision in our post-offering memorandum and articles of association will not operate so as to deprive the courts of the Cayman Islands from having jurisdiction over matters relating to our internal affairs.

 

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Because we do not expect to pay cash dividends in the foreseeable future after this offering, you must rely on a price appreciation of the ADSs for a return on your investment.

We currently intend to retain most, if not all, of our available funds and any future earnings after this offering to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the ADSs as a source for any future dividend income.

Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the Company being unable to pay its debts as they fall due in the ordinary course of business. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors.

Accordingly, the return on your investment in the ADSs will likely depend entirely upon any future price appreciation of the ADSs. There is no guarantee that the ADSs will appreciate in value after this offering or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in the ADSs and you may even lose your entire investment in the ADSs.

You may experience dilution of your holdings due to an inability to participate in rights offerings.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. Under the deposit agreement for the ADSs, the depositary will not offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADS holders are either registered under the Securities Act, or exempt from registration under the Securities Act with respect to all holders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such a registration statement to be declared effective. In addition, we may not be able to take advantage of any exemptions from registration under the Securities Act. Accordingly, holders of the ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.

Although we have paid dividends in the past, our ability to pay dividends in the future depends on many factors and we cannot guarantee you that we will continue to pay dividends in the future.

Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend on then existing conditions, including our financial condition, results of operations, contractual restrictions (including in the agreements governing our credit facilities or other debt instruments), capital requirements, business prospects and other factors our board of directors may deem relevant. In addition, pursuant to the Cayman Islands laws, no dividends may be paid except out of profits or share premium. Furthermore, existing and future financing arrangements may contain covenants that impose restrictions on our business and on our ability to pay dividends under certain circumstances.

We cannot provide assurances regarding the amount or timing of any potential future dividend payments and may decide not to pay dividends in the future. As a result, you should not rely on an investment in the ADSs to provide dividend income and if we do not pay dividends, capital appreciation, if any, of our ordinary shares will be a shareholder’s sole source of gain for the foreseeable future. See “Dividends and Dividend Policy.”

 

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As a foreign private issuer and “controlled company” within the meaning of the NYSE rules, we are permitted to, and we will, rely on exemptions from certain corporate governance standards, including the requirement that a majority of our board of directors consist of independent directors. Our reliance on such exemptions may afford less protection to holders of the ADSs.

The NYSE corporate governance rules require listed companies to have, among other things, a majority of independent board members, a minimum of three members on our audit committee, and independent director oversight of executive compensation, nomination of directors and corporate governance matters. As a foreign private issuer under the securities laws of the United States and “controlled company” within the meaning of the NYSE corporate governance standards, we are permitted to rely on exemptions from certain NYSE corporate governance practices.

A foreign private issuer must disclose in its annual reports filed with the SEC, each NYSE requirement with which it does not comply followed by a description of its applicable home country practice. As an exempted company incorporated in the Cayman Islands and listed on the NYSE, we expect to follow our home country practice with respect to the composition of our board of directors and we do not expect a majority of our directors to be independent. The Companies Act (As Revised) of the Cayman Islands and our post-offering second amended and restated memorandum and articles of association do not require for a majority of our directors to be independent. As such, unlike the position if we were required to comply with the requirements of the NYSE, we do not need to maintain a board comprising a majority of independent directors. As a result, non-independent directors, may, among other things, resolve governance issues regarding our Company.

As long as we rely on the foreign private issuer exemption to certain of the NYSE corporate governance standards, a majority of the directors on our board of directors are not required to be independent directors, our audit committee is not required to have a minimum of three members, and neither our compensation committee nor our nominating and corporate governance committee is required to be comprised entirely of independent directors. Therefore, our board of directors’ approach to governance may be different from that of a board of directors consisting of a majority of independent directors, and, as a result, the management oversight of our Company may be more limited than if we were subject to all of the NYSE corporate governance standards.

In the event we no longer qualify as a foreign private issuer, we intend to rely on the “controlled company” exemption under the NYSE corporate governance rules. A “controlled company” under the NYSE corporate governance rules is a company of which more than 50% of the voting power is held by an individual, group or another company. Following this offering, our Founder, Executive Chairman and Chief Executive Officer, will control a majority of the voting power of our issued and outstanding ordinary shares, making us a “controlled company” within the meaning of the NYSE corporate governance rules. As a controlled company, we would be eligible to, and, in the event we no longer qualify as a foreign private issuer, we intend to elect not to comply with certain of the NYSE corporate governance standards, including the requirement that a majority of directors on our board of directors are independent directors and the requirement that our compensation committee and our nominating and corporate governance committee consist entirely of independent directors.

Accordingly, in the future you may not have the same protections afforded to holders of securities of companies that are subject to all of the requirements under United States federal securities laws and the NYSE corporate governance standards.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

As a public company, our management will have additional obligations that will require their attention and we will incur additional legal, accounting and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements. We also have incurred and will incur costs associated with the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act and related rules implemented or to be implemented by the SEC and the rules of the NYSE. The expenses

 

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incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as our executive officers and will require our management and personnel to devote a substantial amount of time to comply with these rules and regulations. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of the ADSs and/or ordinary shares, fines, sanctions and other regulatory action and potentially civil litigation.

If, in the future, we are deemed not to be an emerging growth company, then under Section 404 of the Sarbanes-Oxley Act, we will be required to furnish a report by our management on our internal control over financial reporting. To achieve compliance with Section 404 within the prescribed period, we would become engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we would need to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite any future efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. If we were to identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

You must rely on the judgment of our management as to the use of the net proceeds from this offering, and such use may not produce income which could result in a decrease in our ADS price.

We will retain broad flexibility and discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not produce income or increase the ADS price. A portion of the net proceeds from our initial public offering is allocated for general corporate purposes. Shareholders will not have the opportunity to influence our management’s decisions on how to use the net proceeds, even if the eventual use of proceeds deviates from the planned use of proceeds described in the section entitled “Use of Proceeds.” The net proceeds may be used for corporate purposes that do not improve our efforts to achieve or maintain profitability or increase the ADS price, and the net proceeds may be utilized in ways that do not produce income or that lose value and such utilization may cause losses. Our failure to apply these funds effectively could have a material and adverse effect on our business and financial condition.

We may lose our foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.

We are a foreign private issuer and therefore we are not required to comply with certain reporting requirements of the Exchange Act applicable to US domestic issuers, including:

 

   

the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

 

   

the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time;

 

   

the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events;

 

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Regulation FD, which regulates selective disclosure of material information by issuers; and

 

   

certain more stringent executive compensation disclosure rules.

In addition, foreign private issuers are not required to file their annual report on Form 20-F until four months after the end of each fiscal year, while US domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. As a result of the above, you may not have the same protections afforded to shareholders of public companies that are not foreign private issuers.

In order to maintain our current status as a foreign private issuer, either (a) a majority of our shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive officers or directors may not be United States citizens or residents, (ii) more than 50% of our assets cannot be located in the United States and (iii) our business must be administered principally outside the United States. If we lose this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to US domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and NYSE rules. The regulatory and compliance costs to us under US securities laws if we are required to comply with the reporting requirements applicable to a US domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to US domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.

We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make the ADSs less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of specified exemptions from various requirements that are otherwise applicable generally to public companies in the United States. These provisions include:

 

   

the ability to present more limited financial data for this offering, including presenting only two years of audited financial statements and only two years of selected financial data, as well as only two years of related management’s discussion and analysis of financial condition and results of operations disclosure;

 

   

an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act; and

 

   

to the extent that we no longer qualify as a foreign private issuer, (1) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (2) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation, including golden parachute compensation.

We may take advantage of certain of these provisions for up to five years after the date of this offering or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07 billion in annual revenue, have more than $700 million in market value of our ordinary shares held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of the above-described provisions. For example, we have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies.

 

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We cannot predict if investors will find the ADSs less attractive as a result of our reliance on exemptions under the JOBS Act. If some investors find the ADSs less attractive as a result, there may be a less active trading market for the ADSs and our share price may be more volatile.

If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, the price of our ADSs and trading volume could decline.

The trading market for the ADSs will depend, in part, on the research reports that securities or industry analysts publish about us or our business. We may be unable to sustain coverage by well-regarded securities and industry analysts. If either none or only a limited number of securities or industry analysts maintain coverage of our Company, or if these securities or industry analysts are not widely respected within the general investment community, the trading price for the ADSs would be negatively impacted. In the event that we obtain securities or industry analyst coverage, if one or more of the analysts who cover us downgrade the ADSs or publish inaccurate or unfavorable research about our business, the price per ADS would likely decline. If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, demand for the ADSs could decrease, which might cause the price per ADS and trading volume to decline.

We may be classified as a passive foreign investment company, or PFIC, for United States federal income tax purposes, which could subject U.S. Holders of the ADSs or ordinary shares to significant adverse United States income tax consequences.

For United States federal income tax purposes, a non-United States corporation, such as our Company, will be treated as a “passive foreign investment company,” or “PFIC” if, in the case of any particular taxable year, either (a) 75% or more of our gross income for such year consists of certain types of “passive” income or (b) 50% or more of the value of our assets (generally determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. Based upon our current and expected income and assets (including goodwill and taking into account the expected proceeds from this offering) and the expected market price of our ADSs following this offering, we do not expect to be a PFIC for the current taxable year or the foreseeable future.

However, while we do not expect to be or become a PFIC, no assurance can be given in this regard because the determination of whether we are or will become a PFIC for any taxable year is a fact-intensive inquiry made annually that depends, in part, upon the composition and classification of our income and assets. Fluctuations in the market price of our ADSs may cause us to be or become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test, including the value of our goodwill and other unbooked intangibles, may be determined by reference to the market price of our ADSs (which may be volatile). The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in this offering. It is also possible that the Internal Revenue Service may challenge our classification of certain income or assets or the valuation of our goodwill and other unbooked intangibles, which may result in our company being or becoming a PFIC for the current or future taxable years.

If we were to be or become a PFIC for any taxable year during which a U.S. Holder (as defined in “Material Tax Considerations—United States Federal Income Tax Considerations”) holds our ADSs or ordinary shares, certain adverse U.S. federal income tax consequences could apply to such U.S. Holder. See “Material Tax Considerations—United States Federal Income Tax Considerations—Passive Foreign Investment Company Considerations.”

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that relate to our current expectations and views of future events. These forward-looking statements are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Industry Overview” and “Business.” These statements relate to events that involve known and unknown risks, uncertainties and other factors, including those listed under “Risk Factors,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, these forward-looking statements can be identified by words or phrases such as “believe”, “plan”, “expect”, “intend”, “should”, “seek”, “estimate”, “will”, “aim” and “anticipate”, or other similar expressions, but these are not the exclusive means of identifying such statements. All statements other than statements of historical facts included in this document, including those regarding future financial position and results, business strategy, plans and objectives of management for future operations (including development plans and dividends) and statements on future industry growth are forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements which are forward-looking statements, including in our periodic reports that we will file with the SEC, other information sent to our shareholders and other written materials.

These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors set forth in “Risk Factors” and the following:

 

   

Changes in the laws, regulations, policies and guidelines in the jurisdictions in which we operate;

 

   

The regulatory environment in the jurisdictions in which we operate;

 

   

Competition in the outsourced business support services industry in the jurisdictions in which we operate;

 

   

Reliance on certain clients for a significant portion of our revenue;

 

   

Developments related to the COVID-19 pandemic, including with respect to the success of any vaccines and the ability of economies and our clients to recover from the economic effects of the pandemic;

 

   

Political instability in the jurisdictions in which we operate;

 

   

Breaches of laws or regulations in the operation and management of our current and future businesses and assets;

 

   

The overall economic environment and general market and economic conditions in the jurisdictions in which we operate;

 

   

Our ability to execute our strategies;

 

   

Changes in the need for capital and the availability of financing and capital to fund these needs;

 

   

Our ability to anticipate and respond to changes in the outsourced business support services industry, the markets in which we operate, and in client demands, trends and preferences;

 

   

Man-made or natural disasters, including war, acts of international or domestic terrorism, civil disturbances, occurrences of catastrophic events and acts of God such as floods, earthquakes, typhoons and other adverse weather and natural conditions that affect our business or assets;

 

   

The loss of key personnel and the inability to replace such personnel on a timely basis or on terms acceptable to us;

 

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Exchange rate fluctuations, including fluctuations in the exchange rates of currencies that are used in our business;

 

   

Changes in interest rates or rates of inflation; and

 

   

Legal, regulatory and other proceedings arising out of our operations.

The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results or performance may be materially different from what we expect.

This prospectus contains certain data and information that we obtained from various government and private publications; including industry data and information from Frost & Sullivan. Statistical data in these publications also include projections based on a number of assumptions. The market for outsourced business support services may not grow at the rate projected by such market data, or at all. Failure of this industry to grow at the projected rate may have a material and adverse effect on our business and the market price of our ADSs. In addition, the rapidly changing nature of the market for outsourced business support services results in significant uncertainties for any projections or estimates relating to growth prospects or future conditions. Furthermore, if any one or more of the assumptions underlying the market data are later found to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements.

 

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ENFORCEABILITY OF CIVIL LIABILITIES

Our company is an exempted company incorporated with limited liability under the laws of the Cayman Islands. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws as compared to the United States and provides less protection for investors. In addition, Cayman Islands companies may not have standing to sue before the U.S. federal courts.

All of our current operations are conducted outside of the United States and all of our current assets are located outside of the United States, with the majority of our operations and current assets being located in Singapore, the Philippines, Malaysia and Thailand. All of the directors and executive officers of our Company and the auditors of our Company reside outside the United States and substantially all of their assets are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon us or any such persons, or to enforce in the United States any judgment obtained in the U.S. courts against us or any of such persons, including judgments based upon the civil liability provisions of the U.S. securities laws or any U.S. state or territory.

We have appointed Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

Cayman Islands

Maples and Calder (Hong Kong) LLP, or Maples, our counsel as to Cayman Islands law, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of the U.S. courts obtained against us or our directors or executive officers that are predicated upon the civil liability provisions of the U.S. securities laws or any U.S. state, or (ii) entertain original actions brought in the Cayman Islands against us or our directors or executive officers that are predicated upon the U.S. securities laws or any U.S. state.

We have been advised by Maples that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is a judgment in personam rather than in rem, (a) is given by foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given or, subject to judicial discretion, a non-monetary judgment in personam, (c) is final and conclusive, (d) is not in respect of taxes, a fine or a penalty or an attempt by a foreign state to act in excess of its jurisdiction by enforcing sovereign acts of that state outside of its own territory, and (e) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the United States courts under civil liability provisions of the U.S. federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liability judgments from the U.S. courts would be enforceable in the Cayman Islands. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

 

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Singapore

There is uncertainty as to whether judgments of courts in the United States based upon the civil liability provisions of the securities laws of the United States or any state or territory of the United States will be recognized or enforced by the Singapore courts, and there is doubt as to whether the Singapore courts will enter judgments in original actions brought in the Singapore courts based solely on the civil liability provisions of these securities laws. An in personam final and conclusive judgment in the federal or state courts of the United States under which a fixed or ascertainable sum of money is payable may generally be enforced as a debt in the Singapore courts under the common law as long as it is established that the Singapore courts have jurisdiction over the judgment debtor. However, the Singapore courts are unlikely to enforce a foreign judgment if (a) the foreign judgment is inconsistent with a prior local judgment that is binding on the same parties; (b) the enforcement of the foreign judgment would contravene the public policy of Singapore; (c) the proceedings in which the foreign judgment was obtained were contrary to principles of natural justice; (d) the foreign judgment was obtained by fraud; or (e) the enforcement of the foreign judgment amounts to the direct or indirect enforcement of a foreign penal, revenue or other public law.

In particular, the Singapore Courts may potentially not allow the enforcement of any foreign judgment for a sum payable in respect of taxes, fines, penalties or other similar charges, including the judgments of courts in the United States based upon the civil liability provisions of the securities laws of the United States or any state or territory of the United States. In respect of civil liability provisions of the United States federal and state securities law which permit punitive damages against us and our directors or executive officers, we are unaware of any decision by the Singapore courts which has considered the specific issue of whether a judgment of a United States court based on such civil liability provisions of the securities laws of the United States or any state or territory of the United States is enforceable in Singapore.

Philippines

The Philippines is a signatory to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, but it is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments. However, generally accepted principles of international law, by virtue of its incorporation in the Philippine Constitution, form part of Philippine law even if its authority is not derived from treaty obligations. It is by virtue of the recognition by Philippine courts as a generally accepted principle of international law the widespread recognition and enforcement of foreign judgments, that Philippine law recognizes and enforces foreign judgments.

The enforceability of foreign judgments in the Philippines is specifically provided for in the 1997 Rules of Civil Procedure. Section 48 of Rule 39 of the Rules of Civil Procedure provides that a judgment or final order of a tribunal of a foreign country having jurisdiction to give the judgment or final order (a) in the case of a judgment or final order upon specific property, is conclusive upon the title to that property; and (b) in the case of a judgment or final order against a person, is presumptive evidence of a right between the parties and their successors in interest by a subsequent title.

A judgment of final order rendered by a foreign court may, however, be repelled by evidence that: (i) the court rendering such judgment had jurisdiction in accordance with its jurisdictional rules, (ii) the other party had notice of the proceedings, (iii) such judgment was not obtained by collusion or fraud or based on a clear mistake of fact or law, and (iv) such judgment was not contrary to public policy or good morals in the Philippines. Moreover, the Philippines enacted Republic Act No. 9285, otherwise known as the Alternative Dispute Resolution Act of 2004, to facilitate the enforcement of arbitral awards in the Philippines. In addition, Article 17 of the Civil Code of the Philippines provides that the judgment must not be contrary to laws that have for their object public order, public policy and good customs in the Philippines. Furthermore, Philippine courts have held that a foreign judgment is presumed to be valid and binding in the country from which it issues, until the contrary is shown, and the party contesting the foreign judgment has the burden of overcoming the presumption of its validity.

 

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Malaysia

The United States is not one of the reciprocating countries under the Reciprocal Enforcement of Foreign Judgments Act 1958 of Malaysia, or REJA, and as such any foreign judgment obtained in the U.S. courts will not be registerable in the courts of Malaysia in accordance with the provisions of REJA. Nevertheless, an action can be commenced in the courts of Malaysia based on the final and conclusive monetary judgment for a definite sum obtained from the U.S. courts as a common law claim for debt. Such judgment would, upon an action on the judgment at common law, be recognized and enforced by the courts of Malaysia, provided that (a) the judgment was not obtained by fraud or in breach of the principles of natural justice, (b) such judgment is not contrary to Malaysian public policy, and (c) the court giving such judgment had jurisdiction to do so according to Malaysian conflict of laws rules.

Thailand

Our Thai counsel, Thanathip & Partners Legal Counsellors Limited, has advised us that Thai courts will not enforce any judgment or order obtained outside Thailand, but that a judgment or order from a foreign court may, if duly authenticated and translated into Thai and in the discretion of a court in Thailand, be admitted as evidence of an obligation in a new proceeding instituted in that court, which would consider the issue on the evidence before it.

China

There is uncertainty as to whether the courts of the PRC would enforce judgments of United States courts obtained against us or these persons predicated upon the civil liability provisions of the United States federal and state securities laws. The recognition and enforcement of foreign judgments are provided for under the Civil Procedures Law of the People’s Republic of China, or the PRC Civil Procedures Law, which was adopted on April 9, 1991, and amended on October 28, 2007, August 31, 2012 and June 27, 2017. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. China does not have any treaties or other form of reciprocity with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States.

 

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USE OF PROCEEDS

We expect that we will receive net proceeds from this offering of approximately US$294.5 million, based on an assumed initial public offering price of US$17.00 per ADS, the mid-point of the estimated range of the initial public offering price set forth on the cover of this prospectus, after deducting the underwriting discounts and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional ADSs from us in full, we expect that we will receive additional net proceeds of US$44.5 million after deducting the underwriting discounts and estimated offering expenses payable by us.

A US$1.00 increase/(decrease) in the assumed initial public offer price of US$17.00 per ADS would increase/(decrease) the net proceeds to us from this offering by approximately US$17.5 million, or approximately US$20.1 million if the underwriters exercise their option to purchase additional ADSs in full, assuming the number of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discounts and estimated offering expenses payable by us.

The primary purposes of this offering are to create a public market for our shares for the benefit of all shareholders, retain talented employees by providing them with equity incentives, obtain additional capital and enhance our brand recognition. We plan to use the net proceeds of this offering as follows:

 

   

to repay the total outstanding principal amount of US$188.0 million and accrued and unpaid interest and premium, if any, under the term loan credit facility, or the Credit Suisse Facility, entered with Credit Suisse AG, Singapore Branch, or Credit Suisse AG, on March 16, 2021, including accrued and unpaid interest and premium (if any). See “Description of Certain Indebtedness—Credit Suisse Facility”; and

 

   

the remainder to enable us to expand our business into new markets, which would include costs for premises, technology and systems and other infrastructure as well as for hiring of personnel and other expansion related expenses, and for general corporate purposes, including working capital needs and potential acquisitions.

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. See “Risk Factors—Risks Related to our Initial Public Offering and the ADSs—We have broad discretion in the use of the net proceeds received by us from this offering and may not use them effectively.”

Pending any use described above, we plan to invest the net proceeds in short-term, interest bearing obligations, investment-grade instruments or certificates of deposit.

 

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CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2021:

 

   

on an actual basis;

 

   

on a pro forma basis to reflect the automatic conversion of all of the shares held by our Principal Shareholder into Class B ordinary shares on a one-for-one basis immediately prior to the completion of this offering; and

 

   

on a pro forma as adjusted basis to reflect (i) the above, (ii) the issuance and sale of 18,772,000 Class A ordinary shares in the form of ADSs by us in this offering at an assumed initial public offering price of US$17.00 per ADS, which is the midpoint of the estimated range of the initial public offering price shown on the front cover of this prospectus, after deducting the underwriting discounts and estimated offering expenses payable by us, assuming the underwriters do not exercise the over-allotment option, and (iii) the application of the net proceeds of the offering to fully repay the total outstanding principal amount of US$188.0 million and accrued and unpaid interest and premium, if any, under the Credit Suisse Facility.

The pro forma as adjusted information below is illustrative only, and our capitalization following the completion of this offering is subject to adjustment based on the actual initial public offering price of our ADSs and other terms of this offering to be determined at pricing. You should read this table in conjunction with “Use of Proceeds,” “Selected Consolidated Financial and Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

 

     As of June 30, 2021  
     Actual     Pro Forma     Pro Forma
as Adjusted
 
     (S$ in thousands)  

Non-current liabilities

      

Bank loans

     263,910       263,910       11,238  
  

 

 

   

 

 

   

 

 

 

Long-term debt

     263,910       263,910       11,238  

Equity:

      

Ordinary shares (par value US$0.0001 per share; 500,000,000 ordinary shares authorized; 123,500,000 ordinary share issued and outstanding on an actual basis)

     16              

Class A ordinary shares (par value US$0.0001 per share; 50,000,000 shares authorized; nil shares issued and outstanding on a pro forma basis; 18,772,000 shares issued and outstanding on a pro forma as adjusted basis)

                 3  

Class B ordinary shares (par value US$0.0001 per share; 200,000,000 shares authorized; 123,500,000 shares issued and outstanding on a pro forma basis; 123,500,000 shares issued and outstanding on a pro forma as adjusted basis)

           16       16  

Undesignated shares (par value US$0.0001 per share; 250,000,000 shares authorized; nil shares issued and outstanding on a pro forma as adjusted basis)

                  

Reserves

     (273,741     (273,741     122,080  

Retained earnings

     177,133       177,133       177,133  

Non-controlling interests

     (174     (174     (174

Total capital deficiency

     (96,766     (96,766 )      299,058  
  

 

 

   

 

 

   

 

 

 

Total capitalization

     167,144       167,144       310,296  
  

 

 

   

 

 

   

 

 

 

 

Notes:

*

Amount is less than S$1,000

 

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On March 16, 2021, we entered into the Credit Suisse Facility. The credit facility provides for borrowings in an aggregate amount of S$252.0 million (US$188.0 million). Contemporaneous with TDCX’s acquisition of our Founder’s shareholder interests in TDCX KY, we drew upon the credit facility on March 23, 2021. Subsequently, we paid the proceeds of S$252.0 million from the Credit Suisse Facility to our Founder for the purchase of his interests in TDCX KY. As described in Note 1 of our unaudited condensed interim consolidated financial statements, the acquisition of TDCX KY by us was accounted for in a manner similar to a pooling of interest with assets and liabilities reflected at their historical amounts in the Group’s consolidated financial statements. The payment of the S$252.0 million of proceeds from the Credit Suisse Facility to our Founder is accounted as a deemed distribution to our Founder in our unaudited condensed interim consolidated financial statements as of June 30, 2021. As of the date of this prospectus, the outstanding principal balance is S$252.7 million (US$188.0 million). Further see “Use of Proceeds” and “Description of Certain Indebtedness — Credit Suisse Facility.”

On August 6, 2021, we utilized S$13.7 million of the multi-currency advance facility that is available pursuant to our facility with OCBC to pay off S$13.7 million of indebtedness outstanding under our refinancing facility that is also available pursuant to our facility with OCBC and which was subsequently extinguished.

 

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DIVIDENDS AND DIVIDEND POLICY

We do not intend to pay any dividends on our ordinary shares or ADSs for the foreseeable future. Instead, we anticipate that all of our earnings, if any, will be used for the operation and growth of our business.

We do not have a fixed dividend policy. Any future determination to declare cash dividends would be subject to the discretion of our board of directors and would depend upon various factors, including our results of operations, financial condition and liquidity requirements, restrictions that may be imposed by applicable law and our contracts and other factors deemed relevant by our board of directors. Our Class B ordinary shares have the same general rights to dividends and other distributions as our Class A ordinary shares and no dividends or distributions may be declared on other classes of our shares without also being paid in the same manner to our Class B ordinary shares.

In the event we decide to pay dividends in the future, subject to the Companies Act of the Cayman Islands, our board of directors may from time to time declare dividends in any currency to be paid on our ordinary shares, and our shareholders may by ordinary resolution declare a dividend, but no dividend shall be declared in excess of the amount recommended by our board of directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profits (including retained earnings) or share premium, provided that in no circumstances may a dividend be paid if this would result in our Company being unable to pay its debts as they fall due in the ordinary course of its business.

Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. In addition, we are a holding company and depend on the receipt of dividends and other distributions from our subsidiaries to pay dividends on our ordinary shares. When making recommendations on the timing, amount and form of future dividends, if any, our board of directors will consider, among other things:

 

   

our results of operations and cash flow;

 

   

our expected financial performance and working capital needs;

 

   

our future prospects;

 

   

our capital expenditures and other investment plans;

 

   

other investment and growth plans;

 

   

dividend yields of comparable companies globally;

 

   

restrictions on payment of dividend that may be imposed on us by our financing arrangements; and

 

   

the general economic and business conditions and other factors deemed relevant by our board of directors and statutory restrictions on the payment of dividends.

If we pay any dividends on our shares, we will pay those dividends which are payable in respect of the underlying Class A ordinary shares represented by our ADSs to the depositary, as the registered holder of such Class A ordinary shares, and the depositary then will pay such amounts to our ADS holders in proportion to the underlying Class A ordinary shares represented by the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. See “Description of American Depositary Shares.” Cash dividends on our Class A ordinary shares, if any, will be paid in U.S. dollars.

We are a holding company and depend on the receipt of dividends and other distributions from our subsidiaries to pay dividends on our ordinary shares. With the exception of Thailand, Malaysia, the Philippines and the PRC, there are no foreign exchange controls or foreign exchange regulations under current applicable laws of the various places of incorporation of our significant subsidiaries that would affect the payment or remittance of

 

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dividends. With respect to Thailand, while Thai laws allow the outward remittance from Thailand of dividends, it is required that the dividend payment in Baht currency (after payment of applicable Thai taxes) must be converted into foreign currency prior to the outward remittance from Thailand as the bank of Thailand has a policy not to allow any person to bring Baht currency out of Thailand.

In Malaysia, the current foreign exchange administration rules allow non-residents to freely repatriate, in a foreign currency, profits and dividends arising from investments or proceeds from divestment of Malaysian Ringgit assets. Dividends are freely transferable out of the country and no exchange controls or approvals are required subject to applicable reporting requirements and withholding tax. However, prior permission from the Controller of Foreign Exchange of Malaysia is required for any person to undertake or engage in any dealing or transaction with the State of Israel or its residents, any entity owned or controlled, directly or indirectly, by the State of Israel or its residents, including any authority or agency of the State of Israel, or any dealing or transaction using or involving the currency of the State of Israel. Furthermore, the Malaysia Companies Act 2016 also provides that (a) generally, a company may only make a distribution to shareholders out of the profits of the company if the company is solvent; (b) before a distribution is paid by a company to a shareholder, such distribution shall be duly authorized by the directors of the company; and (c) unless provided in the constitution of the company, a company may reduce its share capital by a special resolution and either confirmation by a court or a solvency statement by the company.

In the People’s Republic of China, the core regulations governing foreign currency exchange are the Foreign Exchange Administration Regulations of People’s Republic of China, or the PRC Foreign Exchange Administration Regulations, promulgated on January 29, 1996, and amended on January 14, 1997 and August 1, 2008. Certain organizations in the PRC, including foreign invested enterprises, may purchase, sell and/or remit foreign currencies at certain banks authorized to conduct foreign exchange business upon providing valid commercial documents. Under the PRC Foreign Exchange Administration Regulations, overseas payment of dividends does not require regulatory approval or review.

According to the Company Law of the People’s Republic of China, which came into effective on January 1, 2006 and was last amended on October 26, 2018, when a company distributes its profits of the current year, 10% of the profits shall be allocated to its statutory reserve fund. A company is not required to allocate to the statutory reserve fund once the cumulative amount of the statutory reserve fund reaches 50% or more of the company’s registered capital. The statutory reserve fund can be used to cover the losses of a company. If there is any loss of a company accrued in previous years, the company shall use its profits from the current year to cover the losses before accruing the statutory reserve fund. After a company has accrued the statutory reserve fund from its profits, it may, upon a resolution of the shareholder(s), accrue a discretionary reserve fund from the profits. After losses of a company have been made up and allocation to the reserve fund has been made, the remaining profits from either the current year or previous years can be distributed to its shareholder(s). A company shall not make distribution to its holdings of its own equity interests. Under the laws of the People’s Republic of China, dividends paid from our subsidiary located in Beijing are subject to a 10% withholding tax since its shareholder is a non-resident enterprise.

With respect to the Philippines, the board of directors of a Philippine company may only declare dividends out of unrestricted retained earnings. In the case of the payment of stock dividends, the same should be approved by stockholders holding or representing at least two-thirds (2/3) of the outstanding capital stock of the Philippine company. A holder of the shares of a Philippine company shall be entitled to full and immediate repatriation of capital and remittance of dividends, profits and earnings and such holders of shares of the Philippine company shall be entitled to source the foreign exchange necessary for such purposes from the Philippine banking system provided such foreign investment in the shares of the Philippine company has been registered with the Bangko Sentral ng Pilipinas, the central bank of the Philippines. Transfers of the assets of a Philippine company used in relation to its PEZA-registered business require the consent or approval of PEZA. In addition, the transfer/sale of all or substantially all of the assets of a Philippine company shall be subject to the requirements of Act No. 3952, as amended, otherwise known as the “Bulk Sales Law” and the Revised Corporation Code of the Philippines.

 

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DILUTION

If you invest in our ADSs, your interest will be diluted to the extent of the difference between the initial public offering price per ADS and our net tangible book value per ADS after this offering. Dilution results from the fact that the initial public offering price per ADS is substantially in excess of the book value per ordinary share attributable to the existing shareholder for its presently outstanding ordinary shares.

Our net tangible book value as of June 30, 2021 was a deficit of approximately S$96.8 million (US$72.0 million), or negative US$0.58 per ordinary share as of that date. Our net tangible book value is determined by subtracting the value of our intangible assets and total liabilities from our total assets. Dilution is determined by subtracting net tangible book value per ordinary share, after giving effect to the additional proceeds we will receive from this offering, from the assumed initial public offering price of US$17.00 per ADS (the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus) adjusted to reflect the ADS-to-ordinary share ratio, and after deducting underwriting discounts and estimated offering expenses payable by us. Because the Class A ordinary shares and Class B ordinary shares have the same dividend and other rights, except for voting and conversion rights, the dilution is presented based on all issued and outstanding ordinary shares, including Class A ordinary shares and Class B ordinary shares.

Without taking into account any other changes in net tangible book value after June 30, 2021, other than to give effect to (i) the reclassification of our issued and outstanding ordinary shares into 123,500,000 Class B ordinary shares and (ii) our sale of 18,772,000 Class A ordinary shares in the form of the ADSs in this offering at the assumed initial public offering price of US$17.00 per ADS (the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus) after deducting underwriting discounts and estimated offering expenses payable by us and assuming no exercise of the underwriters’ option to purchase additional ordinary shares, our pro forma as adjusted net tangible book value as of June 30, 2021 would have been US$222.5 million, or US$1.56 per ordinary share and US$1.56 per ADS. This represents an immediate increase in net tangible book value of US$2.15 per ordinary share and US$2.15 per ADS to the existing shareholder and an immediate dilution in net tangible book value of US$15.44 per ordinary share and US$15.44 per ADS to new investors purchasing ADSs in this offering.

The following table illustrates such dilution:

 

     Per Ordinary
Share
    Per ADS  

Assumed initial public offering price

   US$ 17.00     US$ 17.00  

Deficit net tangible book value as of June 30, 2021

   US$ 0.58     US$ 0.58  

Amount of dilution in net tangible book value to new investors in this offering

   US$ 15.44     US$ 15.44  

Percentage of dilution in net tangible book value to new investors in this offering

     90.8     90.8

A US$1.00 increase/(decrease) in the assumed initial public offering price of US$17.00 per ADS (the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus) would increase/(decrease) our pro forma as adjusted net tangible book value after giving effect to this offering by US$0.12 per share and US$0.12 per ADS and the dilution in net tangible book value per ordinary share to new investors in this offering by US$0.88 per ordinary share and US$0.88 per ADS, assuming no change to the number of ADSs offered by us as set forth on the cover page of this prospectus, and after deducting the underwriting discounts and estimated offering expenses payable by us.

Assuming the underwriters’ over-allotment option is exercised in full, our net tangible book value as of June 30, 2021 (after giving effect to this offering) would have been US$267.0 million and US$1.84 per outstanding ordinary share. This represents an immediate dilution in as adjusted net tangible book value of US$15.16 per ordinary share to new investors in this offering.

 

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The as adjusted information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our ordinary shares and other terms of this offering determined at pricing.

The following table summarizes, on a pro forma as adjusted basis as of June 30, 2021, the differences between the existing shareholder and the new investors with respect to the number of ordinary shares (in the form of ADSs or shares) purchased from us, the total consideration paid and the average price per ordinary share and per ADS paid before deducting the underwriting discounts and estimated offering expenses payable by us. The total number of ordinary shares does not include Class A ordinary shares underlying the ADSs issuable upon the exercise of the overallotment option granted to the underwriters.

 

     Ordinary Shares
Purchased
     Total Consideration      Average Price
per Ordinary
Share
     Average Price
per ADS
 
     Number      Percent      Amount  

Existing shareholder

     123,500,000        86.8      US$ 12,350      US$ 0.0001      US$ 0.0001  

New investors

     18,772,000        13.2      US$ 319,124,000      US$ 17.00      US$ 17.00  
  

 

 

    

 

 

    

 

 

       

Total

     142,272,000        100.0      US$ 319,136,350      US$ 2.24      US$ 2.24  
  

 

 

    

 

 

    

 

 

       

If the underwriters were to fully exercise the over-allotment option to purchase 2,815,800 additional shares of our Class A ordinary shares from us, the percentage of shares of our shares held by the existing shareholder would be 85.1%, and the percentage of shares of our common stock held by new investors would be 14.9%.

The pro forma information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our ADSs and other terms of this offering determined at pricing.

The discussion and tables above do not reflect any of our shares that may be awarded pursuant to the terms of our PSP. The aggregate nominal number of shares over which our board of directors may award is 5.0% of our total issued and outstanding shares on a fully diluted as-converted basis. In addition, following the closing of the offering, we expect to award, subject to the approval of our board of directors, up to approximately 1,815,000 Class A ordinary shares to certain of our directors, officers and other senior employees under the terms of our PSP.

 

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following selected consolidated financial data as of December 31, 2019 and 2020 and for the years ended December 31, 2018, 2019 and 2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected financial data as of December 31, 2018 is derived from audited financial statement not included herein. The consolidated financial data as of June 30, 2021 and for the six months ended June 30, 2020 and 2021 have been derived from our unaudited condensed interim consolidated financial statements included elsewhere in this prospectus. The selected financial data set forth below should be read in conjunction with, and are qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with IFRS as issued by the IASB. Our historical results do not necessarily indicate results expected for any future period.

Selected Consolidated Statement of Profit or Loss and Other Comprehensive Income

 

     For the Six Months Ended June 30,     For the Year Ended December 31,  
     2021     2020     2020     2019     2018  
     US$     S$     S$     US$     S$     S$     S$  
     (in thousands except per share amounts)  

Revenue

     187,174       251,637       209,280       323,358       434,723       330,265       181,233  

Employee benefits expense

     (115,610     (155,426     (126,167     (191,896     (257,985     (189,912     (109,373

Depreciation expense

     (14,757     (19,839     (15,633     (24,595     (33,065     (24,599     (12,908

Rental and maintenance expense

     (4,223     (5,677     (5,856     (7,887     (10,603     (9,220     (2,623

Recruitment expense

     (3,358     (4,515     (3,942     (5,954     (8,005     (6,680     (3,792

Transport and travelling expense

     (396     (533     (670     (1,119     (1,504     (2,083     (1,358

Telecommunication and technology expense

     (2,916     (3,920     (3,013     (4,690     (6,305     (4,522     (2,385

Interest expense

     (2,787     (3,747     (1,496     (2,275     (3,058     (2,893     (1,128

Other operating expense

     (4,569     (6,144     (9,052     (11,779     (15,836     (10,478     (6,872

Gain on disposal of a subsidiary

                 731       544       731              

Share of profit from an associate

     32       43             146       196              

Interest income

     129       174       245       443       594       465       268  

Other operating income

     2,041       2,744       3,866       5,590       7,514       717       546  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income tax

     40,760       54,797       48,293       79,885       107,397       81,060       41,608  

Income tax expenses

     (7,464     (10,034     (9,769     (15,846     (21,303     (7,524     (3,520
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit for the period

     33,296       44,763       38,524       64,039       86,094       73,536       38,088  

Other comprehensive income (loss)(1)

     (858     (1,153     1,344       398       536       840       (71
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period/year

     32,438       43,610       39,868       64,437       86,630       74,376       38,017  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted earnings per share (in US$ or S$)

     0.27       0.36       0.31       0.52       0.70       0.60       0.31  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pro forma basic and diluted earnings per share(2) (in US$ or S$)

     0.23       0.31                                
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Notes:

(1)

Other comprehensive income (loss) includes remeasurement of retirement benefit obligation and exchange differences on translation of foreign operations.

(2)

Unaudited basic and diluted pro forma net income (loss) per share data assumes that an additional 11,758,493 of our shares of common stock were outstanding for the six months period ended June 30, 2021, which represents the number of shares of common stock that we expect to be issued to fund the debt repayment with the net proceeds of this offering as described in “Use of Proceeds.” The number of shares of common stock that we expect to be issued to fund the debt repayment was calculated in accordance with Staff Accounting Bulletin Topic 3.A. by dividing US$188.1 million, which is the estimated cost to repay indebtedness with the proceeds of this offering as described in “Use of Proceeds,” by US$16.0 per share, the low end of the initial public offering price range included on the cover of this prospectus less underwriting discounts and commissions.

Selected Consolidated Statement of Financial Position

 

                                                                                   
     As of June 30,      As of December 31,  
     2021      2020      2019      2018  
     US$      S$      US$      S$      S$      S$  
     (in thousands)  

ASSETS

                 

Current assets

                 

Cash and cash equivalents

     60,370        81,162        44,486        59,807        35,920        23,973  

Fixed deposits

     5,655        7,602        5,748        7,727        837         

Trade receivables

     34,816        46,806        27,461        36,919        55,278        27,605  

Contract assets

     37,858        50,897        34,842        46,842        26,523        18,605  

Other receivables

     8,985        12,080        9,117        12,257        9,210        5,392  

Tax recoverable

                                        350  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current assets

     147,684        198,547        121,654        163,552        127,768        75,925  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Non-current assets

                 

Pledged deposits

     1,766        2,374        1,768        2,377        2,110        2,096  

Other receivables

     3,389        4,558        4,369        5,874        3,708        2,931  

Plant and equipment

     35,344        47,516        30,185        40,581        40,730        24,911  

Right-of-use assets

     21,024        28,265        21,736        29,221        22,840        18,586  

Loan to an associate

                                 784         

Deferred tax assets

     1,810        2,433        1,175        1,580        1,197        329  

Investment in an associate

     193        260        170        229        33        33  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total non-current assets

     63,526        85,406        59,403        79,862        71,402        48,886  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

     211,210        283,953        181,057        243,414        199,170        124,811  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

LIABILITIES AND (CAPITAL DEFICIENCY)/NET EQUITY

                 

Current liabilities

                 

Other payables

     28,111        37,794        27,671        37,200        26,926        15,870  

Amount due to founder

                                        10,469  

Bank loans

     18,703        25,144        17,978        24,170        34,421        6,374  

Lease liabilities

     10,512        14,132        10,907        14,664        10,963        7,634  

Provision for reinstatement cost

     2,767        3,720        336        452                

Income tax payable

     9,209        12,381        9,861        13,257        6,956        3,229  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current liabilities

     69,302        93,171        66,753        89,743        79,266        43,575  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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     As of June 30,     As of December 31,  
     2021     2020     2019     2018  
     US$     S$     US$     S$     S$     S$  
     (in thousands)  

Non-current liabilities

            

Bank loans

     196,303       263,910       12,002       16,136             24,174  

Lease liabilities

     12,822       17,238       13,257       17,823       14,498       12,495  

Provision for reinstatement cost

     3,374       4,536       4,178       5,617       4,955       1,817  

Defined benefit obligation

     1,282       1,723       1,067       1,435       769       315  

Deferred tax liabilities

     105       141       96       129       236       365  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     213,886       287,548       30,600       41,140       20,458       39,167  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Capital, reserves and non-controlling interest

            

Share capital

     12       16       *       *       *       *  

Reserves

     (203,616     (273,741     (14,760     (19,843     (20,650     (21,604

Retained earnings

     131,756       177,133       98,462       132,371       120,094       63,673  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Deficit)/ Equity attributable to owners of the Group

     (71,848     (96,592     83,702       112,528       99,444       42,069  

Non-controlling interests

     (130     (174     2       3       2       1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Capital deficiency)/ Net equity

     (71,978 )      (96,766 )      83,704       112,531       99,446       42,070  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and (capital deficiency)/ net equity

     211,210       283,953       181,057       243,414       199,170       124,811  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Amount is less than S$1,000

Selected Consolidated Statement of Cash Flows

 

                                                                                          
     For the Six Months Ended
June 30,
    For the Year Ended December 31,  
     2021     2020     2020     2019     2018  
     US$     S$     S$     US$     S$     S$     S$  
                                         (Restated)  
     (in thousands)  

Net cash from operating activities

     39,798       53,505       83,944       97,057       130,484       76,044       37,320  

Net cash used in investing activities

     (11,906     (16,006     (7,228     (17,615     (23,682     (27,627     (20,863

Net cash used in financing activities

     (11,559     (15,540     (1,962     (61,941     (83,274     (36,655     (10,680
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in cash and cash equivalents

     16,333       21,959       74,754       17,501       23,528       11,762       5,777  

Effect of exchange rate changes on balance of cash held in foreign currencies

     (449     (604     736       267       359       185       (71

Cash and cash equivalents at the beginning of the period/year

     44,486       59,807       35,920       26,718       35,920       23,973       18,267  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period/year

     60,370       81,162       111,410       44,486       59,807       35,920       23,973  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Other Financial and Operating Data

 

                                                                     
     Six Months Ended
June 30,
     Year Ended December 31,  
   2021      2020      2020      2019      2018  

Revenue (S$ thousands)

     251,637        209,280        434,723        330,265        181,233  

Profit for the period (S$ thousands)

     44,763        38,524        86,094        73,536        38,088  

EBITDA (S$ thousands)(1)

     78,209        65,177        142,926        108,087        55,376  

Net profit margin (%)

     17.8        18.4        19.8        22.2        21.0  

EBITDA margin (%)(1)

     31.1        31.1        32.9        32.7        30.6  

Number of clients(2)

     43        41        38        38        36  

Number of agents(2)

     10,020        7,473        9,128        7,213        4,608  

Revenue per agent (S$ thousands)(3)

     28        27        54        54        49  

Debt (bank loans) (S$ thousands)

     289,054        40,113        40,306        34,421        30,548  

Debt/EBITDA Ratio(1)

     N/A        N/A        0.3        0.3        0.6  

 

Notes:

(1)

EBITDA, EBITDA margin and Debt/EBITDA Ratio are non-IFRS financial measures. We define EBITDA as profit for the year/period before interest expense, interest income, income tax expense and depreciation expense, EBITDA margin as EBITDA as a percentage of revenue, Debt as bank loans and Debt/EBITDA Ratio as bank loans divided by EBITDA. EBITDA, EBITDA margin and Debt/EBITDA Ratio are not measures calculated in accordance with IFRS. As a result of our early adoption of IFRS 16 Leases as of January 1, 2017 using the full retrospective approach, EBITDA and EBITDA margin disclosed may not be comparable to similarly titled measures reported by other companies as our calculation includes depreciation on the right-of-use assets and finance costs on lease liabilities. While we believe that EBITDA, EBITDA margin and Debt/EBITDA Ratio provide useful information to investors in understanding and evaluating our results of operations in the same manner as our management, our use of EBITDA, EBITDA margin and Debt/EBITDA Ratio has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under IFRS. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operational Metrics—Non-IFRS Financial Measures” for information regarding the limitations of using EBITDA, EBITDA margin and Debt/EBITDA Ratio as financial measures.

The following table presents a reconciliation of EBITDA to profit for the period and EBITDA margin to net profit margin, the most directly comparable financial measure calculated and presented in accordance with IFRS, for the periods indicated:

 

                                                                                   
     For the Year Ended December 31,  
     2020     2019     2018  
     US$     S$     Margin     S$     Margin     S$     Margin  
     (in thousands, except percentages)  

Revenue

     323,358       434,723             330,265             181,233        

Profit for the year and net profit margin

     64,039       86,094       19.8     73,536       22.2 %      38,088       21.0

Adjustments:

              

Depreciation expense

     24,595       33,065       7.6     24,599       7.4     12,908       7.1

Income tax expenses

     15,846       21,303       4.9     7,524       2.3     3,520       2.0

Interest expense

     2,275       3,058       0.7     2,893       0.9     1,128       0.6

Interest income

     (442     (594     (0.1 %)      (465     (0.1 %)      (268     (0.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA and EBITDA margin

     106,313       142,926       32.9     108,087       32.7 %      55,376       30.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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     For the Six Months Ended June 30,  
     2021     2020  
     US$     S$     Margin     S$     Margin  
     (in thousands, except percentages)  

Revenue

     187,174       251,637             209,280        

Profit for the period and net profit margin

     33,296       44,763       17.8     38,524       18.4

Adjustments:

          

Depreciation expense

     14,757       19,839       7.9     15,633       7.5

Income tax expenses

     7,464       10,034       4.0     9,769       4.7

Interest expense

     2,787       3,747       1.5     1,496       0.7

Interest income

     (129     (174     (0.1 %)      (245     (0.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA and EBITDA margin

     58,175       78,209       31.1     65,177       31.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(2)

The number of clients and number of agents are calculated as of December 31 of the year indicated or as of June 30 of the period indicated.

(3)

Revenue per agent is calculated as revenue for a period divided by the average of the number of agents at the end of each month during such period. We monitor our revenue per agent because we believe it measures our success in expanding our client relationships higher up the value chain. Our client contracts are mostly based on a fixed rate per FTE dedicated and assigned to the applicable campaign. Under our employee classification system, an FTE is classified as an “agent.”

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the information under “Selected Consolidated Financial and Other Data” and our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.

Overview

We are a high-growth digital customer experience solutions provider for innovative technology and other blue-chip companies. We offer omnichannel CX solutions, sales and digital marketing services and content monitoring and moderation services. We have specific expertise in providing tailored digital customer experience solutions to manage complex customer interactions that go beyond providing boilerplate responses and which require a highly trained workforce capable of effectively delivering our differentiated services and solutions to our clients and their customers. Our focus on complex digital solutions enables us to provide higher value services and solutions for our clients. Our strategy has resulted in a highly attractive financial profile. We have experienced robust growth. From the year ended December 31, 2018 to the year ended December 31, 2020, our revenue, profit for the year and EBITDA have grown at a CAGR of 54.9%, 50.3% and 60.7%, respectively. In the years ended December 31, 2018, 2019 and 2020, we recorded revenue of S$181.2 million, S$330.3 million and S$434.7 million (US$323.3 million), profit for the year of S$38.1 million, S$73.5 million and S$86.1 million (US$64.0 million) and EBITDA of S$55.4 million, S$108.1 million and S$142.9 million (US$106.0 million), respectively. For the same periods, we recorded net profit margins of 21.0%, 22.2% and 19.8%, respectively, and EBITDA margins of 30.6%, 32.7% and 32.9%, respectively. In the six months ended June 30, 2020 and 2021, we recorded revenue of S$209.3 million and S$251.6 million (US$187.2 million), profit for the period of S$38.5 million and S$44.8 million (US$33.3 million) and EBITDA of S$65.2 million and S$78.2 million (US$58.2 million), respectively. For the same six month periods, we recorded net profit margins of 18.4% and 17.8%, respectively, and EBITDA margins of 31.1% and 31.1%, respectively.

We believe our employees and our distinctive corporate culture are key enablers of our success, a core strength and part of our competitive advantage. Our corporate culture is designed to foster a work environment that attracts, develops and retains a highly skilled workforce that can effectively engage in complex customer interactions. We focus on reinforcing a culture that emphasizes a sustainable and collaborative approach while being fully committed to our clients’ requirements. We strive to ensure that our distinctive culture is incorporated within all the relationships and processes of our organization and fits within our values and goals.

We have an international footprint. As of the date of this prospectus, we service our clients’ customers globally in more than 20 languages. This international footprint is supported by 13,308 employees as of June 30, 2021, who are located in offices in ten geographies: Singapore, the Philippines, Malaysia, Thailand, China, Japan, Spain, India, Colombia and Romania.

Our business comprises three key service offerings: (1) omnichannel CX solutions; (2) sales and digital marketing services; and (3) content monitoring and moderation services. We also offer services consisting of miscellaneous activities, such as providing workspaces to existing clients and providing human resource and administration services to clients. We help our clients manage relationships with their customers by providing digital customer experience solutions, such as after-sales service and customer support across ten industry verticals, including travel and hospitality, digital advertising and media and fast-moving consumer goods. Our sales and digital marketing services offering helps our clients market their products and services to potential customers in both the business-to-consumer, or B2C, and the business-to-business, or B2B, markets. Our content

 

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monitoring and moderation services offering helps our clients create a safe and secure online environment for social media platforms by providing a human touch to content monitoring and moderation services.

Factors Affecting Our Results of Operations

We believe that the growth and future success of our business depends on many factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth, improve our results of operations and establish and maintain profitability.

Demand for our services and the pace of adoption of omnichannel CX solutions

We believe the market remains in the early stages of adoption for digital services, and the demand for, and the pace of adoption of, our services is a key driver of our revenues. Over the last few years, the increasing pace of digital change has powered the growth of technology disruptors that rely on outsourced digital customer experience solution providers. Rapid digital change has also driven the disruption of traditional blue-chip companies that have been adopting digital service delivery models. According to Frost & Sullivan, the penetration of outsourced business support services in the traditional economy continues to steadily gain traction as companies expand the scope of the business functions they outsource, particularly as it relates to their digital transformation journey. This increased demand for digital omnichannel CX solutions provides us with the opportunity to further expand our share of our existing clients’ spending and add new clients, which, in turn, increases our revenues. We have evolved our services to focus on value-added high-complexity offerings. Our focus on handling complex and mission-critical digital customer experience interactions, enhanced by our ability to solve problems for our clients by leveraging customer interaction data analytics, have allowed us to work our way up the value chain and become a comprehensive solutions provider, which we believe has enabled us to continue growing our revenues.

Expanding relationships with existing clients

We are focused on deepening and broadening our engagements with, and campaigns for, our existing clients, and our success in doing so is an important driver of our revenue growth. We have historically proven our ability to significantly scale client relationships over time by expanding the scope and size of our engagements, as well as by taking on work higher up the value chain. For example, Facebook, Airbnb and a leading streaming platform became clients in 2014, 2015 and 2015, respectively, and are now among our key clients due to the expansion of relationships we have with them. As of December 31, 2020, we had 30 clients that paid us fees in amounts less than S$5.0 million in the year ended December 31, 2020, and these clients provide opportunities for us to expand and upscale our engagements.

We monitor our revenue per agent, which is calculated as revenue for a period divided by the average number of agents for such period, because we believe it measures our success in expanding our client relationships higher up the value chain. Revenue per agent increased 9.3% from S$48,969 in the year ended December 31, 2018 to S$53,545 in the year ended December 31, 2019 and increased 0.6% from S$53,545 in the year ended December 31, 2019 to S$53,869 in the year ended December 31, 2020. Our revenue per agent increased 1.82% from S$27,010 in the six months ended June 30, 2020 to S$27,502 in the six months ended June 30, 2021. Our ability to expand our relationships with our existing clients is driven by several factors such as our track record in consistently providing high quality services to our clients’ satisfaction across locations and campaigns while staying agile and flexible to serve our clients’ dynamic and evolving needs. Our strategy has been to open offices in new geographies where we believe that there is strong potential to expand our services offerings to existing clients, grow the number of FTEs we provide in existing campaigns and enhance our share of client spending. As a result, our new office rental and maintenance expenses and other related expenses may increase before we record commensurate increases in revenue or employee benefits expenses.

 

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Delivering complex and high value services for our clients, which impacts pricing of our services and our profitability

We offer customized and differentiated CX solutions and possess the ability to handle complex and mission-critical customer experience interactions. These offerings go well beyond traditional business process outsourcing of help desk functions, as they require a higher degree of training and employee competency to undertake interactions where customer-service scripts would be insufficient to resolve customer problems. This type of work produces higher value for our clients and enables us to price our services accordingly. We also have also increasingly started to gravitate towards high-value, complex interactions, which result in higher margins for our services. For example, since 2018, we have provided technical and customer support for a search engine client’s top-tier advertising customers, which were previously handled entirely by our client’s in-house team. See “Business—Case Studies—Search Engine Client.” Support for the client’s top-tier customers was mission critical, of a higher order of complexity than other interactions with the client, and required shorter issue turnaround times. Consequently, we were able to price these services at higher levels and generate higher margins than other campaigns for this client. Our ability to innovate and offer complex and high value offerings when our clients need them is an important driver of our revenues and margins. Finally, as we expand our service offerings and geographies in which we have delivery centers, we are able to optimize our cost structure across our operations.

Adding new clients that support our growth strategy

From January 1, 2018 to June 30, 2021, we have acquired 32 new clients that we believe offer us the opportunity to effectively execute our growth strategy. Our new clients are high-growth, new economy disruptors and traditional blue-chip companies engaged in businesses across multiple jurisdictions, whereas many of our legacy clients tended to be locally focused in only one or two jurisdictions. For example, since 2018, we have grown relationships with a global payments platform provider, a leading social network, a leading consumer electronics company, a leading regional e-commerce platform and a leading video game developer. Our newer multinational clients are capable of engaging us in campaigns across more jurisdictions and utilizing a wider range of our services because of their varied, dispersed and more complex business requirements. This transition to a multinational client base has driven the growth of our campaign volumes and revenues. As we continue to develop a multinational client base, we expect the volume of work from our clients across our entire platform to continue to grow. Our ability to add new multinational clients is a driver of our revenues and is impacted by factors such as positive market reputation of our services and our ability to handle complex client omnichannel CX solutions over a broad international footprint.

Efficiently recruiting and managing talent while managing labor costs

We believe the quality of our employees is a key differentiator in securing and retaining business, as well as in delivering a superior customer experience. Through our structured recruitment process and strong emphasis on career development, we strive to attract, develop and retain the industry’s higher caliber talent. Our results of operations are impacted by: (1) our ability to recruit within short time frames and manage our employees as we scale our business; (2) our ability to optimize productivity; and (3) our ability to manage labor costs.

Attracting, recruiting and managing talent

Our ability to attract, recruit, nurture, train and develop new employees is critical to our ability to grow and scale our business. While we grow our revenues, we also seek to develop a talent pool that can deliver increasing revenue per agent. It is critical that we hire personnel accurately and efficiently with right profile candidates for new campaigns. For some fast deployment campaigns that require talents that are either highly skilled or not available in great abundance, we may utilize higher cost recruitment sourcing channels such as external recruitment agencies to supplement our internal direct hiring. However, after the initial ramp up phases, as the campaign begins to stabilize and normal employee attrition takes its course, our internal recruitment sourcing

 

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allow us to hire new employees at a lower cost. We streamlined our recruitment process and boosted the efficiency of our recruitment activities through the development and implementation of in-house proprietary recruitment systems that work in tandem with external human resource management software platform. For example, we developed Flash Hire, a highly customized, remote, video-based recruitment platform that automates initial candidate screening and selection by conducting online interviews and administrating online tests. Our development and implementation of Flash Hire prior to the COVID-19 pandemic has enabled us to hire employees in growing geographic markets during the COVID-19 pandemic.

Personnel retention is one of our top priorities, and we dedicate resources to the educational development of our employees and employee wellbeing, including the development of their professional skills through obtaining relevant certifications and promoting participation in internal and external training sessions. In the year ended December 31, 2018, 2019 and 2020, our annual voluntary attrition rate, measured by the number of employees that voluntary left us in a period divided by the average number of employees in such period, was 21.5%, 23.1% and 24.8%, respectively, compared to the industry average of 30% to 34% in the Asia Pacific region, according to Frost & Sullivan. Reducing employee attrition helps us control our recruitment expense. In the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, our recruitment expense was 2.7%, 2.7%, 2.4%, 2.4% and 2.3% of our total operating expenses, respectively.

Improving productivity of employees

We believe that our people are our most important asset. We focus on maximizing our employees’ ability to deliver value to our clients through high-value work, which in turn increases our potential revenue per agent. We have developed effective and cost-efficient training and knowledge-base, or KB Tool, management tools, such as Flash Learn, our online learning platform, and KB Tool, our data portal, which allow us to quickly and effectively train our employees to handle complex interactions and employ them in high-value work. Agents who deliver higher complexity services typically provide higher revenue per agent, on average, with employees providing content monitoring and moderation services providing the highest return, followed by employee providing sales and digital marketing services. We have also invested in technological infrastructure that allows us to enhance productivity, such as AI-enhanced chat-bot functionality that can automatically handle many interactions but can also seamlessly hand contact over to human staff to manage more difficult situations. This allows us to increase the volume of interactions that a single human can support.

Managing labor costs

Employee benefits expense primarily consists of the wages we pay to our employees and is our most significant expense, accounting for 78.5%, 76.7%, 77.4%, 76.7% and 79.3%, of our total operating expenses in the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, respectively. As we continue to grow our business, we expect that our number of employees will increase, which we expect to drive growth in our revenues as well as our employee benefits expense.

While we expect our labor costs to increase in the future as we continue to grow our business and number of employees, we aim to manage our labor costs so that they do not increase at a rate faster than our revenues. We typically formalize a new campaign or expansion of an existing campaign before we hire employees for those campaigns. Our client contracts are mostly based on a fixed rate per FTE dedicated and assigned to the applicable campaign. Under our employee classification system, a FTE is classified as an “agent.” We seek to secure new campaigns at projected revenue levels that match our estimates of the expansion of our work force and increased costs that we expect to incur based on our accumulated experience in the particular business segment and jurisdiction. When considering the fixed rate for such applicable FTE, we also consider factors such as anticipated cost and wage inflation applicable for the relevant office location and the employee skill set that we need.

Our employee benefits expense with respect to an ongoing campaign is usually relatively stable. However, our overall employee benefit expense varies by the mix of services that we provide and the campaigns we undertake.

 

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Employee wages vary by the type of service provided and the skill set of the relevant employees. Agents who deliver higher complexity services typically earn higher wages, on average, with employees providing content monitoring and moderation services receiving the highest wages, followed by employee providing sales and digital marketing services. As the requirements for services we provide change, our employee benefit expense may also change. In addition, the compensation may also include variable components, such as bonuses and performance incentives. In particular, the compensation for employees providing sales and digital marketing services generally includes a higher composition of variable, performance-based commission component linked to a campaign’s KPIs, such as sales attainment by agent.

Following the closing of the offering, we expect to award, subject to the approval of our board of directors, up to approximately 1,815,000 Class A ordinary shares to certain of our directors, officers and other senior employees under the terms of our PSP. For the purpose of preparing our financial statements, we expect that such share grants will be valued at the fair value of such awards at the date of such award. Accordingly, commencing in the fourth quarter of the year ended December 31, 2021, we expect to start incurring share-based payment expense with respect to such awards. For more information on our PSP, see “Management — Performance Share Plan.”

Foreign exchange rate fluctuations

We conduct business in multiple countries and currencies, such as the U.S. dollar, Singapore dollar, Philippines peso and Malaysian ringgit, and the currencies of other countries where we have operations, and exchange rate fluctuations, especially between the Singapore dollar and the U.S. dollar, may impact our results of operations. We earn revenue primarily denominated in U.S. dollars and Singapore dollars. We incur rental payments, and expenses for employee compensation and other operating expenses in the local currencies of the jurisdictions in which we operate. Since our presentation currency is the Singapore dollar, and we translate revenues earned, expenses incurred or assets and liabilities denominated in such currencies to Singapore dollars when preparing our consolidated financial results, we are exposed to fluctuations in foreign exchange rates primarily on (i) fluctuations between the Singapore dollar, on the one hand, and other currencies in which we earn revenue, particularly the U.S. dollar, on the other hand, and (ii) fluctuations between the Singapore dollar, on the one hand and other currencies in which we have expenditures, particularly Philippine pesos, Thai baht and Malaysian ringgit, on the other hand. Currency fluctuations, especially the appreciation of the Singapore dollar relative to the U.S. dollar could negatively impact our results of operations, while an appreciation of the Singapore dollar relative to the Philippine peso, Thai baht, Malaysian ringgit and U.S. dollar could positively impact our results of operations. We are also exposed to foreign exchange rate fluctuations on assets and liabilities denominated in foreign currencies. In certain circumstances, we may utilize forward foreign exchange contracts or option contracts to hedge the risk of foreign exchange volatility of the Singapore dollar, Malaysian ringgit and Philippines peso. For further information regarding the impact of foreign exchange rate fluctuations on our results of operations and our use of foreign exchange derivative contracts, see “—Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Risk.”

Income tax expense

We are subject to income taxes in Singapore, the Philippines, Malaysia, Thailand and the other jurisdictions where we have offices. Our income taxes, which is reflected on our consolidated statement of profit or loss and other comprehensive income as “Income tax expense”, consists primarily of taxes incurred, or potential claims from, tax authorities in the jurisdictions in which we operate. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted at the end of the applicable reporting period. Our effective tax rates differ from the statutory rate applicable to us primarily due to differences between domestic and foreign jurisdiction tax rates, tax credits, non-taxable items, non-deductible expenses, and the impact of tax concessions and benefits in certain jurisdictions. For example, our subsidiary in Malaysia was awarded the Multimedia Super Corridor status in 2005 by the Ministry of Finance and Ministry of International Trade and Industry of Malaysia, which entitled the subsidiary to enjoy tax incentives under the Customized Incentive scheme. The scheme allowed for a partial tax exemption for the subsidiary on the statutory income earned from its core operations for a certain period. However, these benefits expired on January 18, 2020. We have initiated

 

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discussions with relevant governmental agency authorities to renew such benefits on a retrospective basis and have applied for these benefits to be extended. In the Philippines, we have benefited from an income tax holiday through our registration with PEZA. Our income tax holiday by PEZA for one of our sites expired on March 31, 2021. Changes in the geographic mix of our revenue can cause our overall effective tax rate to vary from period to period. Our income tax expense for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021 was S$3.5 million, S$7.5 million, S$21.3 million, S$9.8 million and S$10.0 million, respectively.

A certain degree of judgment is required in evaluating our tax positions and determining our provision for income taxes. Tax exposures can involve technical interpretations of issues and may require an extended period to resolve. Many tax authorities have significant backlogs of other cases that may also result in extended periods to achieve resolution on open issues. We cannot assure you that the final tax outcome of these matters will not be different from our current estimates. We adjust our reserves in light of changing facts and circumstances, such as the closing of a tax audits, statute of limitation lapses or the refinement of tax estimates. To the extent the final tax outcome of these matters differs from the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. See also, “Risk Factors—Risks Related to Our Business and Industry—Tax matters, including any reduction or withholding of tax benefits and other incentives we receive, new legislation and actions by taxing authorities may have an adverse effect on our operations, effective tax rate and financial condition.”

Certain Income Statements Line Items

Revenue

We derive our revenues from providing services to our clients. Revenue is measured based on the consideration specified in a contract with a client and recognized as and when control of a service is transferred to a client, meaning when the performance obligations to the client are met. We usually enter into master service agreements with our clients, which provide a framework for services and statements of work. These statements of work define the scope, timing, pricing terms and performance obligations for each individual campaign under the respective master service agreements. Our contracts with our clients have both fixed and variable components. The agreements typically specify a fixed rate per FTE that comes with either a variable price component or fee deduction that is based on meeting (or the failure to meet) certain key performance indicators. Based on the transaction price in the agreement for each performance obligation, we invoice our clients on a monthly basis as each performance obligation is satisfied after adjusting for fee deductions based on whether we meet (or fail to meet) certain KPIs (where applicable) during that month. In general, we invoice our clients within five to 30 business days from end of the month and typically receive payment within the 30 to 90 day period from the invoice date set forth in our client contracts.

We discuss below the breakdown of our services by revenue and geographic segment and client concentration. For additional information regarding our revenue recognition policy, see “—Critical Accounting Policies—Revenue Recognition.”

Revenue by Service

Our business comprises three key service offerings: (1) omnichannel CX solutions; (2) sales and digital marketing services; (3) content monitoring and moderation services. We also receive service fee revenues from miscellaneous activities, such as revenues from renting out workspace within our offices and providing human resource and administration services to clients, as well as other miscellaneous service fees.

 

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The following table sets forth our service provided, by amount and as a percentage of our revenues for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021.

 

     For the Year Ended December 31,  
     2020      2019      2018  
     US$      S$      % of
Revenue
     S$      % of
Revenue
     S$      % of
Revenue
 
    

(in thousands, except percentages)

 

Revenue by Service

                    

Omnichannel CX solutions

     210,820        283,427        65.2        217,349        65.8        120,238        66.4  

Sales and digital marketing

     49,267        66,235        15.3        46,839        14.2        43,124        23.8  

Content monitoring and moderation

     59,633        80,170        18.4        61,526        18.6        14,361        7.9  

Other service fees(1)

     3,638        4,891        1.1        4,551        1.4        3,510        1.9  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenue

     323,358        434,723        100.0        330,265        100.0        181,233        100.0  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     For the Six Months Ended June 30,  
     2021      2020  
     US$      S$      % of
Revenue
     S$      % of
Revenue
 
    

(in thousands, except percentages)

 

Revenue by Service

              

Omnichannel CX solutions

     117,292        157,688        62.7        138,396        66.1  

Sales and digital marketing

     35,492        47,715        19.0        29,335        14.0  

Content monitoring and moderation

     32,019        43,046        17.1        39,441        18.8  

Other service fees(1)

     2,371        3,188        1.2        2,108        1.1  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenue

     187,174        251,637        100.0        209,280        100.0  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Note:

(1)

Revenues from other service fees include revenues classified in our Consolidated Financial Statements as workspace, payroll outsourcing and other services.

Geographic Segment

We have an international footprint. As of the date of this prospectus, we service our clients’ customers globally in more than 20 languages through our offices in ten geographies, namely: Singapore, Malaysia, Thailand, Philippines, Japan, China, Spain, India, Colombia and Romania. We present our revenue by geographic location based on which office delivers the service, irrespective of the location of the client engaging our services or the location of the customer that we are interacting with. The delivery center location out of which we provide services does not correlate consistently to the location of the customers of our clients. For example, a particular delivery center location may provide services to client A’s customers in North America, while a different delivery center location may provide services to client B’s customers in North America, as these determinations vary based on client choices, relevant skills, particular campaigns and other considerations. Delivery center locations out of which we provide services to a particular geography may also vary from period to period, client to client and service to service. Moreover, customers of our clients may access our services from various geographies and not just the location of their residence.

 

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The following table sets forth our revenues by geography, by amount and as a percentage of our revenues for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021.

 

     For the Year Ended December 31,  
     2020      2019      2018  
     US$      S$      % of
Revenue
     S$      % of
Revenue
     S$      % of
Revenue
 
            (in thousands, except percentages)  

Geography(1)

                    

Singapore(2)

     90,049        121,062        27.9        96,175        29.1        64,256        35.5  

Philippines(3)

     81,276        109,268        25.1        84,169        25.5        49,946        27.5  

Malaysia(2)

     84,035        112,976        26.0        82,795        25.1        48,421        26.7  

Thailand(2)

     40,304        54,185        12.5        41,445        12.5        12,961        7.1  

Japan

     16,929        22,759        5.2        9,008        2.7        1,722        1.0  

China

     8,554        11,500        2.6        16,099        4.9        3,927        2.2  

Spain(4)

     2,211        2,973        0.7        574        0.2                

India(1)

                                                

Colombia(1)

                                                

Romania(1)

                                                
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     323,358        434,723        100.0        330,265        100.0        181,233        100.0  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     For the Six Months Ended June 30,  
     2021      2020  
     US$      S$      % of
Revenue
     S$      % of
Revenue
 
     (in thousands, except percentages)  

Geography(1)

              

Singapore(2)

     50,488        67,876        27.0        56,713        27.1  

Philippines(3)

     47,692        64,117        25.5        49,983        23.9  

Malaysia(2)

     48,118        64,690        25.7        56,773        27.1  

Thailand(2)

     24,006        32,274        12.8        26,114        12.5  

Japan

     11,077        14,892        5.9        11,712        5.6  

China

     3,649        4,906        1.9        6,801        3.2  

Spain(4)

     2,144        2,882        1.2        1,184        0.6  

India(1)

                                  

Colombia(1)

                                  

Romania(1)

                                  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     187,174        251,637        100.0        209,280        100.0  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Notes:

(1)

For a description of the services provided in each of our offices in the above table, along with our offices in Colombia and India, which were opened after December 31, 2019, and our office in Romania, which was opened after December 31, 2020, see “Business – Our Offices.”

(2)

The offices in Singapore, Malaysia and Thailand primarily provide support to Southeast Asian and North Asian customers in a variety of regional languages, including Mandarin Chinese speakers in the region, which we refer to as our “Southeast Asia” end-market.

(3)

The offices in the Philippines primarily provide English language support to customers mainly in North America, the United Kingdom, Ireland, Australia and New Zealand, which we refer to as our “Global English” end-market.

(4)

Our office in Spain was opened towards the end of 2018.

 

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Employee Benefits Expense

Our employee benefits expense consists primarily of wages and salaries paid to agents, support and management personnel, commissions and incentive payments, payments to defined contribution plans, directors’ remuneration and others.

Depreciation Expense

Depreciation consists of depreciation expense recorded on right-of-use assets with respect to our property leases, leasehold improvements, furniture and fittings and office equipment and software, over an item’s useful life.

Rental and Maintenance Expense

Rental and maintenance expense consists of the rent we pay for the use of office equipment, including computer equipment, short term and temporary workspace rental and other costs associated with the maintenance and upkeep of our offices.

Recruitment Expense

Recruitment expenses consists of the expenses related to our recruitment efforts, such as staff referral bonuses, job board subscriptions, placement fee paid to recruiters, contract buyouts paid to former employers of new employees and the costs paid for immigration and work permits, travel and temporary accommodations for expatriate employees.

Transportation and Travelling Expense

Transportation and travelling expense consists of airfare, transport, hotels and other travel allowances paid to our employees for short-term travel.

Telecommunication and Technology Expense

Telecommunication and technology expense consists of telephone, voice, fax and mobile communication costs, data communication costs, information technology supplies, internet connection costs, data network lines and outsourced information technology services.

Interest expense

Interest expense consist of interest on our bank loans and interest on lease liabilities for our property leases.

Other Operating Expense

Other operating expenses consist of advertising costs, cloud software subscription fees, various professional service fees, stamp levies, insurance expense, utilities expense, cleaning and security costs, printing and stationery, other miscellaneous office and establishment costs and gain or loss from foreign exchange movement.

Other Comprehensive Income

We recognize certain items that will not be reclassified to profit or loss on our consolidated statement of income. In particular, we recognize the remeasurement of retirement benefit obligations, which is the fair value of our retirement benefit obligations, which are adjusted on an annual basis to account for changes to the actuarial assumptions used to calculate such amounts, including the relevant mortality rate and future cash flow discount rate.

 

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We also recognize the exchange differences on translation of foreign operations as part of our total comprehensive income, which reflects the currency effects of consolidating our foreign operations.

Results of Operations

The following table sets forth a summary of our consolidated results of operations for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021.

 

                                                                          
     For the Six Months
Ended June 30,
    For the Year Ended December 31,  
     2021     2020     2020     2019     2018  
     (S$ in thousands)  

Revenue

     251,637       209,280       434,723       330,265       181,233  

Employee benefits expense

     (155,426     (126,167     (257,985     (189,912     (109,373

Depreciation expense

     (19,839     (15,633     (33,065     (24,599     (12,908

Rental and maintenance expense

     (5,677     (5,856     (10,603     (9,220     (2,623

Recruitment expense

     (4,515     (3,942     (8,005     (6,680     (3,792

Transport and travelling expense

     (533     (670     (1,504     (2,083     (1,358

Telecommunication and technology expense

     (3,920     (3,013     (6,305     (4,522     (2,385

Interest expense

     (3,747     (1,496     (3,058     (2,893     (1,128

Other operating expense

     (6,144     (9,052     (15,836     (10,478     (6,872

Gain on disposal of a subsidiary

           731       731              

Share of profit from an associate

     43             196              

Interest income

     174       245       594       465       268  

Other operating income

     2,744       3,866       7,514       717       546  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income tax

     54,797       48,293       107,397       81,060       41,608  

Income tax expenses

     (10,034     (9,769     (21,303     (7,524     (3,520
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit for the period/year

     44,763       38,524       86,094       73,536       38,088  

Other comprehensive income (loss)(1)

     (1,153     1,344       536       840       (71
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period/year

     43,610       39,868       86,630       74,376       38,017  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted earnings per share (in S$)

     0.36       0.31       0.70       0.60       0.31  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Note:

(1)

Other comprehensive income (loss) includes remeasurement of retirement benefit obligation and exchange differences on translation of foreign operations.

Comparison of the Six Months Ended June 30, 2021 and 2020

Revenue. Our revenues increased by 20.2% to S$251.6 million (US$187.2 million) for the six months ended June 30, 2021 from S$209.3 million for the six months ended June 30, 2020 primarily due to a 62.7% increase in revenue from providing sales and digital marketing services, a 13.9% increase in revenues from providing omnichannel CX solutions as well as a 9.1% increase in revenues from providing content monitoring and moderation services. In each case, the increase was primarily driven by increased demand for services from existing new economy clients.

 

   

Our revenues from providing omnichannel CX solutions increased by 13.9% to S$157.7 million (US$117.3 million) for the six months ended June 30, 2021 from S$138.4 million for the six months ended June 30, 2020 primarily due to increased revenues from one of our largest new economy clients from the expansion of existing campaigns in Singapore and the Philippines, which on a combined basis, contributed to a 114.8% increase in revenues from that client compared to the prior period. Furthermore, we also had increased revenues from another new economy client for services provided

 

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from our Malaysia delivery center, which contributed to a 32.6% increase in revenue from that client compared to the prior period. During the same period, these gains were offset by a 27.5% decrease in revenue from clients in the travel and hospitality sectors (including from Airbnb), due to the disruptions in the travel industry caused by COVID-19, primarily with respect to services delivered out of our China, Japan and Malaysia service delivery locations.

 

   

Our revenues from providing sales and digital marketing services increased by 62.7% to S$47.7 million (US$35.5 million) for the six months ended June 30, 2021 from S$29.3 million for the six months ended June 30, 2020 primarily due to revenue generated from the expansion of existing campaigns (i) for an existing new economy client from our Singapore and Philippines offices; (ii) for an existing new economy client campaign from our Malaysia, Philippines and China offices; and (iii) for an existing new economy client campaign from our Spain office.

 

   

Our revenues from providing content monitoring and moderation services increased by 9.1% to S$43.0 million (US$32.0 million) for the six months ended June 30, 2021 from S$39.4 million in the six months ended June 30, 2020 primarily due to the continued expansion of existing content moderation campaigns for one of our largest clients from our Singapore and Thailand offices and the contribution from several new campaigns for this client that commenced in the fourth quarter of 2020 from our Thailand office.

 

   

Our revenues from our other service fees increased by 51.2% to S$3.2 million (US$2.4 million) for the six months ended June 30, 2021 from S$2.1 million for the six months ended June 30, 2020 primarily due to an increase in revenue earned from new projects from our existing clients as well as the fees from the onboarding of a new client and fees associated with the expansion of an ongoing campaign with an existing client.

Employee Benefits Expense. Our employee benefits expense increased by 23.1% to S$155.4 million (US$115.6 million) for the six months ended June 30, 2021 from S$126.2 million for the six months ended June 30, 2020 primarily due to an increase in employee headcount. Our average number of employees in the first half of 2021 increased 23.3% compared to the same period of 2020, as a result of the increase in our business over the course of 2020 as well as increase in staffing in the first half of 2021 in anticipation of the commencement of new campaigns in 2021 and volume expansion in existing campaigns.

Depreciation Expense. Our depreciation expense increased by 26.9% to S$19.8 million (US$14.8 million) for the six months ended June 30, 2021 from S$15.6 million for the six months ended June 30, 2020 primarily due to depreciation on right-of-use assets with respect to our property leases resulting from expansion of office space and/or new leases in Malaysia, Thailand, Philippines, Japan, Spain, India and Colombia. In addition, there was increased depreciation on renovations and capital expenditures undertaken in the expansion of our office space to support the growth of our business, but this was partially offset by certain of our assets having become fully depreciated in the period and, accordingly, no longer contributing to our depreciation expense.

Rental and Maintenance Expense. Our rental and maintenance expense decreased by 3.1% to S$5.7 million (US$4.2 million) for the six months ended June 30, 2021 from S$5.9 million for the six months ended June 30, 2020 primarily due to the transition of our Spanish office from co-working space memberships, which were categorized as rental expenses, to a new office space, which we leased and therefore recognized as a right-of-use asset subject to depreciation. This was offset by an overall increase in expenses relating to the leasing of computer equipment to support increased work from home arrangements in the first half of 2021 in Malaysia and the Philippines, as further COVID-19 related restrictions were imposed.

Recruitment Expense. Our recruitment expense increased by 14.6% to S$4.5 million (US$3.4 million) for the six months ended June 30, 2021 from S$3.9 million for the six months ended June 30, 2020 primarily due to increased expenses relating to higher placement fees and expenses associated with immigration and work permits for international employees to support expanded campaigns in our Singapore, Japan, Thailand and Malaysia

 

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offices. This was partially offset by reduced travel by our recruiters resulting from COVID-19 related travel restrictions and increased use of our Flash Hire platform.

Transport and Travelling Expense. Our transport and travelling expense decreased by 20.6% to S$0.5 million (US$0.4 million) for the six months ended June 30, 2021 from S$0.7 million for the six months ended June 30, 2020 primarily related to a decrease in travel as a result of COVID-19.

Telecommunication and Technology Expense. Our telecommunication and technology expense increased by 30.1% to S$3.9 million (US$2.9 million) for the six months ended June 30, 2021 from S$3.0 million for the six months ended June 30, 2020 primarily due to increased costs of telecommunications infrastructure and greater payments for software licenses as we expanded our business in the last three quarters of 2020 and the first half of 2021. In addition, our data usage significantly increased due to client preferences with respect to the retention of control of their customers’ information, which requires us to use more data to access customer information on our clients’ networks than if the customer information were stored on our own network.

Interest expense. Our interest expense increased by 150.5% to S$3.7 million (US$2.8 million) for the six months ended June 30, 2021 from S$1.5 million for the six months ended June 30, 2020 primarily due to interest expense relating to the Credit Suisse Facility.

Other Operating Expense. Our other operating expense decreased by 32.8% to S$6.1 million (US$4.6 million) for the six months ended June 30, 2021 from S$9.1 million for the six months ended June 30, 2020 primarily due to a reduction in professional fees associated with the offering incurred in the relevant periods.

Gain on Disposal of a Subsidiary. We did not dispose any subsidiary in the six months ended June 30, 2021. In the six months ended June 30, 2020, we recognized a gain on disposal of a subsidiary of S$0.7 million related to the disposal of a subsidiary in Indonesia.

Share of Profit from an Associate. Our share of profit from an associate was negligible for the six months ended June 30, 2021 and for the six months ended June 30, 2020 due to recognition of the negligible share of profit from an associate in Hong Kong during the period.

Other Operating Income. Our other operating income decreased by 29.0% to S$2.7 million (US$2.0 million) for the six months ended June 30, 2021 from S$3.9 million for the six months ended June 30, 2020 primarily due to government grants we received in response to the COVID-19 pandemic in the second quarter of 2020, being reduced through the first half of 2021.

Profit Before Income Tax. As a result of the foregoing, our profit before income tax increased by 13.5% to S$54.8 million (US$40.8 million) for the six months ended June 30, 2021 from S$48.3 million for the six months ended June 30, 2020.

Income Tax Expenses. Our income tax expenses increased by 2.7% to S$10 million (US$7.5 million) for the six months ended June 30, 2021 from S$9.8 million for the six months ended June 30, 2020. The rate of increase in income tax expenses was lower than the 13.5% increase in profit before income tax because we derived a greater proportion of profit before income tax from a site in the Philippines with a lower effective tax rate due to tax incentives as compared to the six months ended June 30, 2020.

Profit for the period. As a result of the foregoing, our profit for the period increased by 16.2% to S$44.8 million (US$33.3 million) for the six months ended June 30, 2021 from S$38.5 million for the six months ended June 30, 2020.

Other Comprehensive Income (Loss). Our other comprehensive income was a loss of S$1.2 million (US$0.9 million) in the first six months of 2021, compared to income of S$1.3 million in the first six months of 2020, primarily due to effects of exchange rate differences on translation of foreign operations on consolidation.

 

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Total Comprehensive Income for the Period. As a result of the foregoing, our total comprehensive income for the period increased by 9.4% to S$43.6 million (US$32.4 million) for the six months ended June 30, 2021 from S$39.9 million for the six months ended June 30, 2020.

Comparison of Years Ended December 31, 2019 and 2020

Revenue. Our revenues increased by 31.6% to S$434.7 million (US$323.4 million) for the year ended December 31, 2020 from S$330.3 million for the year ended December 31, 2019 primarily due to a 30.4% increase in revenues from providing omnichannel CX solutions, a 41.4% increase in revenue from providing sales and digital marketing service, as well as a 30.3% increase in revenues from providing content monitoring and moderation services. In each case, the increase was primarily driven by increased demand for services from existing new economy clients.

 

   

Our revenues from providing omnichannel CX solutions increased by 30.4% to S$283.4 million (US$210.8 million) for the year ended December 31, 2020 from S$217.3 million for the year ended December 31, 2019 primarily due to increased revenues from one of our largest clients from the expansion of existing campaigns in Singapore and the Philippines, which on a combined basis, contributed to a 157.1% increase in revenues from that client compared to 2019 revenue from that client. This includes campaigns which commenced in 2019 and were in effect for a full year in 2020. Furthermore, we also had increased revenues from another new economy client for services provided from our Malaysia delivery center, which contributed to an 202.4% increase in revenue from that client from 2019. In addition, we generated a 368.1% increase in revenues from a new economy client from 2019 that we onboarded from our Philippines and Japanese delivery centers in the fourth quarter of 2019, due to an increase in scale of these campaigns, as well as the full year effect of providing services to this client. During the same period, these gains were offset by a 13.2% decrease in revenue from clients in the travel and hospitality sectors (including from one of our largest clients), due to the disruptions in the travel industry caused by COVID-19, primarily with respect to services delivered out of our Philippines and Chinese service delivery locations.

 

   

Our revenues from providing sales and digital marketing services increased by 41.4% to S$66.2 million (US$49.3 million) for the year ended December 31, 2020 from S$46.8 million for the year ended December 31, 2019 primarily due to revenue generated from the expansion of existing campaigns (i) for an existing new economy client from our Singapore office; and (ii) from the expansion of an existing new economy client campaign from our Malaysia office. Our revenue also increased due to the commencement of a new campaign for an existing client from our Beijing office.

 

   

Our revenues from providing content monitoring and moderation services increased by 30.3% to S$80.2 million (US$59.6 million) for the year ended December 31, 2020 from S$61.5 million in the year ended December 31, 2019 primarily due to the continued expansion of existing content moderation campaigns for one of our largest clients from our Singapore and Thailand offices and the commencement of several new campaigns for this client in the fourth quarter of 2020 from our Thailand office.

 

   

Our revenues from our other service fees increased by 7.5% to S$4.9 million (US$3.6 million) for the year ended December 31, 2020 from S$4.6 million for the year ended December 31, 2019 primarily due to increase in revenue earned from new projects from our existing clients.

Employee Benefits Expense. Our employee benefits expense increased by 35.8% to S$258.0 million (US$191.9 million) for the year ended December 31, 2020 from S$189.9 million for the year ended December 31, 2019 primarily due to an increase in employee headcount. Our average number of employees in 2020 increased 23.3% from 2019. The larger rate of increase in employee benefits expense as compared to our average headcount was due to expansion of our existing campaigns and commencement of new campaigns from our existing new economy clients, which had language and skill requirements that required us to hire higher-wage employees. Notwithstanding the overall increase in headcount and employee benefits expense, the decrease

 

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in activity of a number of campaigns, in particular with respect to the travel and hospitality sector, resulted in layoffs of agents engaged in such campaigns in the second and third quarter of 2020. Following these reductions in headcount, our overall headcount continued to increase as campaigns for clients in other sectors increased in activity throughout 2020.

Depreciation Expense. Our depreciation expense increased by 34.4% to S$33.1 million (US$24.6 million) for the year ended December 31, 2020 from S$24.6 million for the year ended December 31, 2019 primarily due to depreciation on right-of-use assets with respect to our property leases resulting from expansion of office space and/or new leases in Malaysia, the Philippines, Thailand, Shanghai, Colombia and India. In addition, there was increased depreciation on renovations and capital expenditures undertaken to support the growth of our business.

Rental and Maintenance Expense. Our rental and maintenance expenses increased by 15.0% to S$10.6 million (US$7.9 million) for the year ended December 31, 2020 from S$9.2 million for the year ended December 31, 2019 primarily due to increased physical co-working space required for our operations in Yokohama, Japan in 2019 as well as the cleaning and security costs and technology equipment installations in our new and expanded office spaces.

Recruitment Expense. Our recruitment expense increased by 19.8% to S$8.0 million (US$6.0 million) for the year ended December 31, 2020 from S$6.7 million for the year ended December 31, 2019 primarily related to our increase in employee headcount as our average number of employees in 2020 increased 23.3% from 2019. The increase in our recruitment expense was primarily due to increases in the number of our employees in the Philippines whom we hired to fulfill increased demand from our clients as we scaled up existing campaigns and commenced new campaigns and increased expenditure on immigration and work permits in Malaysia and the Philippines due to the increase in foreign employees situated in these offices.

Transport and Travelling Expense. Our transport and travelling expense decreased by 27.8% to S$1.5 million (US$1.1 million) for the year ended December 31, 2020 from S$2.1 million for the year ended December 31, 2019 primarily related to a decrease in travel as a result of COVID-19.

Telecommunication and Technology Expense. Our telecommunication and technology expense increased by 39.4% to S$6.3 million (US$4.7 million) for the year ended December 31, 2020 from S$4.5 million for the year ended December 31, 2019 primarily due to increased costs of telecommunications infrastructure and greater payments for software licenses as we expanded our business. In addition, our data usage significantly increased due to client preferences with respect to the retention of control of their customers’ information, which requires us to use more data to access customer information on our clients’ networks than if the customer information were stored on our own network.

Interest expense. Our interest expense increased by 5.7% to S$3.1 million (US$2.3 million) for the year ended December 31, 2020 from S$2.9 million for the year ended December 31, 2019 primarily due to an increase in interest expense on lease liabilities.

Other Operating Expense. Our other operating expenses increased by 51.1% to S$15.8 million (US$11.8 million) for the year ended December 31, 2020 from S$10.5 million for the year ended December 31, 2019 primarily due to transaction costs associated with the offering, an increase in professional fees and the forfeiture of upfront deposits paid by our subsidiary in Japan due to premature termination of the rental commitment in view of the planned relocation of the operations to its own-fitted office site in Yokohama scheduled by end of the second quarter of 2021. These increases were partly offset by reductions in realized and unrealized foreign exchange currency losses.

Gain on Disposal of a Subsidiary. Our gain on disposal of a subsidiary increased by 100.0% to S$0.7 million (US$0.5 million) for the year ended December 31, 2020 due to the disposal of a subsidiary in Indonesia during the year.

 

 

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Share of Profit from an Associate. Our share of profit from an associate increased by 100.0% to S$0.2 million (US$0.1 million) for the year ended December 31, 2020 due to recognition of the share of profit from an associate in Hong Kong during the year.

Other Operating Income. Our other operating income increased by 948.0% to S$7.5 million (US$5.6 million) for the year ended December 31, 2020 from S$0.7 million for the year ended December 31, 2019 primarily due to an increase in government grant and credit scheme subsidies in Singapore, the most significant of which relates to the Jobs Support Scheme, which contributed to an S$5.3 million increase.

Profit Before Income Tax. As a result of the foregoing, our profit before income tax increased by 32.5% to S$107.4 million (US$79.9 million) for the year ended December 31, 2020 from S$81.1 million for the year ended December 31, 2019.

Income Tax Expenses. Our income tax expenses increased by 183.1% to S$21.3 million (US$15.8 million) for the year ended December 31, 2020 from S$7.5 million for the year ended December 31, 2019. The rate of increase in income tax expenses was higher than the 32.5% increase in profit before tax because of the expiration of tax incentives in Malaysia in January 2020, which resulted in our Malaysian office paying standard corporate tax rates in 2020, as well as an increase in taxable profit generated from Singapore.

Profit for the year. As a result of the foregoing, our profit for the year increased by 17.1% to S$86.1 million (US$64.0 million) for the year ended December 31, 2020 from S$73.5 million for the year ended December 31, 2019.

Other Comprehensive Income. Our other comprehensive income was S$0.5 million (US$0.4 million) in 2020, compared to S$0.8 million in 2019, primarily due to effects of exchange rate differences on translation of foreign operations.

Total Comprehensive Income for the Year. As a result of the foregoing, our total comprehensive income for the year increased by 16.5% to S$86.6 million (US$64.4 million) for the year ended December 31, 2020 from S$74.4 million for the year ended December 31, 2019.

Comparison of Years Ended December 31, 2018 and 2019

Revenue. Our revenues increased by 82.2% to S$330.3 million for the year ended December 31, 2019 from S$181.2 million for the year ended December 31, 2018 primarily due to a 80.8% increase in revenues from providing omnichannel CX solutions, a 8.6% increase in revenue from providing sales and digital marketing service, as well as a 328.4% increase in revenues from providing content monitoring and moderation services. In each case, these increases were primarily driven by increased demand for services from existing clients.

 

   

Our revenues from providing omnichannel CX solutions increased by 80.8% to S$217.3 million for the year ended December 31, 2019 from S$120.2 million for the year ended December 31, 2018 primarily due to increased revenues from two of our largest clients for key campaigns from our Singapore, Philippines and Malaysia offices, which on a combined basis, contributed to a 42.2% increase in revenues from 2018. This includes campaigns which commenced in the second half of 2018 and were in effect for a full year in 2019 with one of our largest clients. Furthermore, we also had increased revenues from one of our largest clients for services provided from our Japan and China delivery centers, which on a combined basis contributed to an 8.4% increase in revenue from 2018. In addition, we generated a 5.0% increase in revenues from 2018 from a new economy client that we onboarded from our Malaysia office in the second quarter of 2018, due to an increase in scale of the campaign, as well as the full year effect of providing services to this client.

 

   

Our revenues from providing sales and digital marketing services increased by 8.6% to S$46.8 million for the year ended December 31, 2019 from S$43.1 million for the year ended December 31, 2018

 

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primarily due to revenue generated from new campaigns (i) for an existing new economy client from our Japan office that commenced in December 2018 but that we scaled up through 2019; (ii) from our Malaysia office that commenced in the second quarter of 2019; and (iii) from our Beijing office in the second and third quarters of 2019. There were also campaigns that commenced in the first and third quarters of 2018 for the same new economy client from our Malaysia office and continued throughout the year in 2019. This new economy client contributed to a 21.7% increase in revenues from 2018.

 

   

Our revenues from providing content monitoring and moderation services increased by 328.4% to S$61.5 million for the year ended December 31, 2019 from S$14.4 million in the year ended December 31, 2018, primarily due to the commencement of a content moderation campaign for one of our largest clients in the third quarter of 2018 from our Singapore and Thailand offices. The campaign subsequently became fully operational and significantly contributed to our revenue in 2019.

 

   

Our revenues from our other service fees increased by 29.7% to S$4.6 million for the year ended December 31, 2019 from S$3.5 million for the year ended December 31, 2018 primarily due to an increase in revenue earned from new projects from our existing clients.

Employee Benefits Expense. Our employee benefits expense increased by 73.6% to S$189.9 million for the year ended December 31, 2019 from S$109.4 million for the year ended December 31, 2018 primarily due to an increase in employee headcount. Our average number of employees in 2019 increased 66.4% from 2018. The larger rate of increase in employee benefits expense as compared to our average headcount was due to expansion of our existing campaigns and commencement of new campaigns from our existing new economy clients, which had language and skill requirements that required us to hire higher-wage employees. In addition, the full year effect with respect to employees of certain significant new campaigns that were launched in the third and fourth quarters of 2018 contributed to the increase in employee benefits expense for the year ended December 31, 2019.

Depreciation Expense. Our depreciation expense increased by 90.6% to S$24.6 million for the year ended December 31, 2019 from S$12.9 million for the year ended December 31, 2018 due to increased depreciation on renovations and capital expenditure incurred to keep pace with our business volume growth, especially in Singapore, Malaysia, Philippines and Thailand. In addition, there was increased depreciation on right-of-use assets with respect to our property leases resulting from expansion of office space, especially in Thailand.

Rental and Maintenance Expense. Our rental and maintenance expenses increased by 251.5% to S$9.2 million for the year ended December 31, 2019 from S$2.6 million for the year ended December 31, 2018 primarily due to increased physical co-working space required for our operations (for the establishment of our short term temporary workspace in Spain and Yokohama, Japan in 2019) as well as the technology equipment installations at these new premises.

Recruitment Expense. Our recruitment expense increased by 76.2% to S$6.7 million for the year ended December 31, 2019 from S$3.8 million for the year ended December 31, 2018 primarily related to our rapid increase in employee headcount as our average number of employees in 2019 increased 66.4% from 2018. The increase in our recruitment expense was primarily due to increases in the number of our employees in China, Japan, the Philippines and Malaysia whom we hired to fulfill increased demand from our clients as we scaled up existing campaigns and commenced new campaigns.

Transport and Travelling Expense. Our transport and travelling expense increased by 53.4% to S$2.1 million for the year ended December 31, 2019 from S$1.4 million for the year ended December 31, 2018 primarily related to the increase in our headcount and the expansion of our geographic footprint.

Telecommunication and Technology Expense. Our telecommunication and technology expense increased by 89.6% to S$4.5 million for the year ended December 31, 2019 from S$2.4 million for the year ended December 31, 2018 primarily due to increased costs of telecommunications infrastructure as we expanded our business. In addition, our data usage significantly increased due to client preferences with respect to the retention of control of their customers’ information, which requires us to use more data to access customer information on our clients’ networks than if the customer information were stored on our own network.

 

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Interest expense. Our interest expense increased by 156.5% to S$2.9 million for the year ended December 31, 2019 from S$1.1 million for the year ended December 31, 2018 primarily due to the increase in indebtedness in connection with bank loans as well as an increase in interest expense on lease liabilities.

Other Operating Expense. Our other operating expenses increased by 52.5% to S$10.5 million for the year ended December 31, 2019 from S$6.9 million for the year ended December 31, 2018 primarily due to an increase in utilities and maintenance expenses as a result of our increase in office space, as well as realized and unrealized foreign exchange currency loss.

Other Operating Income. Our other operating income increased by 31.3% to S$0.7 million for the year ended December 31, 2019 from S$0.5 million for the year ended December 31, 2018 due to an increase in government grant and credit scheme subsidies in Singapore.

Profit Before Income Tax. As a result of the foregoing, our profit before income tax increased by 94.8% to S$81.1 million for the year ended December 31, 2019 from S$41.6 million for the year ended December 31, 2018.

Income Tax Expenses. Our income tax expenses increased by 113.8% to S$7.5 million for the year ended December 31, 2019 from S$3.5 million for the year ended December 31, 2018. The rate of increase in income tax expenses was marginally higher than the 94.8% increase in profit before tax because of the larger contribution of taxable profit generated from our Singapore and Thailand offices, which were not entitled to tax incentives similar to those received by our offices in the Philippines and Malaysia over the same period.

Profit for the year. As a result of the foregoing, our profit for the year increased by 93.1% to S$73.5 million for the year ended December 31, 2019 from S$38.1 million for the year ended December 31, 2018.

Other Comprehensive Income. Our other comprehensive income was S$0.8 million in 2019, compared to minimal income in 2018, primarily due to effects of exchange rate differences on translation of foreign operations.

Total Comprehensive Income for the Year. As a result of the foregoing, our total comprehensive income for the year increased by 95.6% to S$74.4 million for the year ended December 31, 2019 from S$38.0 million for the year ended December 31, 2018.

 

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Selected Quarterly Results of Operations

The following table sets forth our unaudited condensed consolidated quarterly results of operations for each of the six quarters from January 1, 2020 to June 30, 2021. You should read the following table in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus. We have prepared this unaudited condensed consolidated quarterly financial data on the same basis as we have prepared our audited consolidated financial statements. The unaudited condensed consolidated quarterly financial data include all adjustments, consisting only of normal and recurring adjustments, that our management considers necessary for a fair statement of our financial position and results of operation for the quarters presented.

 

     For the Three Months Ended  
     June 30,
2021
    March 31,
2021
    December 31,
2020
    September 30,
2020
    June 30,
2020
    March 31,
2020
 
     (S$ in thousands)  

Revenue

     131,565       120,072       120,174       105,269       103,074       106,206  

Employee benefits expense

     (80,672     (74,754     (68,863     (62,955     (62,765     (63,402

Depreciation expense

     (9,899     (9,940     (8,913     (8,519     (8,094     (7,539

Rental and maintenance expense

     (2,839     (2,838     (2,423     (2,324     (2,875     (2,981

Recruitment expense

     (2,534     (1,981     (2,230     (1,833     (1,691     (2,251

Transport and travelling expense

     (305     (228     (232     (602     (301     (369

Telecommunication and technology expense

     (2,053     (1,867     (1,691     (1,601     (1,536     (1,477

Interest expense

     (2,826     (921     (787     (775     (703     (793

Other operating expense

     (3,341     (2,803     (4,171     (2,613     (8,179     (873

Gain on disposal of a subsidiary

                                   731  

Share of profit from an associate

     18       25       196                    

Interest income

     90       84       169       180       121       124  

Other operating income

     1,017       1,727       1,984       1,664       3,503       363  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income tax

     28,221       26,576       33,213       25,891       20,554       27,739  

Income tax expenses

     (5,805     (4,229     (6,251     (5,283     (5,050     (4,719
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit for the period

     22,416       22,347       26,962       20,608       15,504       23,020  

Other comprehensive income (loss)(1)

     (1,041     (112     (1,253     445       (400     1,744  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

     21,375       22,235       25,709       21,053       15,104       24,764  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted earnings per share (in S$)

     0.18       0.18       0.22       0.17       0.13       0.19  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Note:

(1)

Other comprehensive income (loss) includes remeasurement of retirement benefit obligation and exchange differences on translation of foreign operations.

Quarterly Trends

Our revenues and profitability have varied from quarter to quarter. Our revenues slightly decreased in the second quarter of 2020 due to decreased revenue from clients in the travel and hospitality sectors (including from Airbnb) from S$41.3 million in the first quarter of 2020 to S$29.9 million in the second quarter of 2020 resulting from the decrease in travel associated with COVID-19, however this was partially offset by an increase in revenue from existing and newly acquired new economy and traditional blue-chip clients in the same quarter. Revenues from these existing and newly acquired new economy clients continued to grow in the third and fourth quarters of 2020, while revenues from clients in the travel and hospitality sectors began to stabilize and, in some cases, recover. Revenues in the first quarter of 2021 remained even with the fourth quarter of 2020, given the

 

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decrease in revenue from clients in the travel and hospitality sectors (including from Airbnb) related to seasonality, offset by an increase in revenue from our largest new economy clients. However, revenues resumed growth in the second quarter of 2021 as economies began to open up as COVID-19 related restrictions eased and our existing clients expanded their campaigns.

Our other operating expense increased in the second quarter of 2020 primarily due to transaction costs associated with the offering as well as foreign currency losses arising from the effect of a weakened U.S. dollar on our U.S. dollar-denominated receivables and increased again in the fourth quarter of 2020 primarily due to similar foreign currency losses as in the second quarter of 2020 as well as costs associated with our transition into more permanent office space in Japan. We also incurred expenses due to the loss of deposits associated with office space which we were planning on utilizing in the second quarter of 2020 and subsequently decided not to occupy. Our employee benefits expense generally increased in the first and second quarters of 2021, as compared to the first and second quarters of 2020, due to an increase in our business from the expansion of existing projects and onboarding of new clients in various jurisdictions over the course of 2021, which resulted in an increase in our employee headcount, and this trend has continued into the third quarter of 2021. Our other operating income increased in the second quarter of 2020 due to government grants we received in response to the COVID-19 pandemic, which we continued to receive in each subsequent quarter of 2020 and including the first and second quarter of 2021. Our interest expenses increased in the second quarter of 2021 as we recognized our first full quarter of interest on the Credit Suisse Facility, which we expect to repay using a portion of the net proceeds from this offering.

Key Financial and Operating Metrics

We regularly monitor a number of financial and operating metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. Our financial and operating metrics may be calculated in a different manner than similarly titled metrics reported by other companies.

The following table sets forth our key financial and operating metrics as of and for the periods indicated.

 

                                                                     
     Six Months Ended
June 30,
     Year Ended December 31,  
   2021      2020      2020      2019      2018  

Revenue (S$ thousands)

     251,637        209,280        434,723        330,265        181,233  

Profit for the period (S$ thousands)

     44,763        38,524        86,094        73,536        38,088  

EBITDA (S$ thousands)(1)

     78,209        65,178        142,926        108,087        55,376  

Net profit margin (%)

     17.8        18.4        19.8        22.2        21.0  

EBITDA margin (%)(1)

     31.1        31.1        32.9        32.7        30.6  

Number of clients(2)

     43        41        38        38        36  

Number of agents(2)

     10,020        7,473        9,128        7,213        4,608  

Revenue per agent (S$ thousands)(3)

     28        27        54        54        49  

Debt (bank loans) (S$ thousands)

     289,054        40,113        40,306        34,421        30,548  

Debt/EBITDA Ratio(1)

     N/A        N/A        0.3        0.3        0.6  

 

Notes:

(1)

EBITDA and Debt/EBITDA Ratio are non-IFRS financial measures. See “—Non-IFRS Financial Measures” for information regarding the limitations of using EBITDA as a financial measure.

(2)

As of the end of the year or period.

(3)

Revenue per agent is calculated as revenue for a period divided by the average of the number of agents at the end of each month during such period. We monitor our revenue per agent because we believe it measures our success in expanding our client relationships higher up the value chain. Our client contracts are mostly based on a fixed rate per FTE dedicated and assigned to the applicable campaign. Under our employee classification system, an FTE is classified as an "agent."

 

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Non-IFRS Financial Measurements

EBITDA, EBITDA margin and Debt/EBITDA Ratio are non-IFRS financial measures. We monitor EBITDA and EBITDA margin because they assist us in comparing our operating performance on a consistent basis by removing the impact of items not directly resulting from our core operations. We define EBITDA as profit for the year before interest expense, interest income, income tax expense and depreciation expense, EBITDA margin as EBITDA as a percentage of revenue, Debt as bank loans and Debt/EBITDA Ratio as bank loans divided by EBITDA. EBITDA, EBITDA margin and Debt/EBITDA Ratio are not measures calculated in accordance with IFRS. As a result of our early adoption of IFRS 16 Leases as of January 1, 2017 using the full retrospective approach, EBITDA and EBITDA margin disclosed may not be comparable to similarly titled measures reported by other companies as our calculation includes depreciation on the right-of-use assets and finance costs on lease liabilities. While we believe that EBITDA, EBITDA margin and Debt/EBITDA Ratio provide useful information to investors in understanding and evaluating our results of operations in the same manner as our management, our use of EBITDA, EBITDA margin and Debt/EBITDA Ratio have limitations as analytical tools and you should not consider these in isolation or as a substitute for analysis of our results of operations or financial condition as reported under IFRS.

The following table presents a reconciliation of EBITDA to profit for the period and EBITDA margin to net profit margin, the most directly comparable financial measure calculated and presented in accordance with IFRS, for the periods indicated:

 

                                                                                   
     For the Year Ended December 31,  
     2020     2019     2018  
     US$     S$     Margin     S$     Margin     S$     Margin  
     (in thousands, except percentages)  

Revenue

     323,358       434,723             330,265             181,233        

Profit for the year and net profit margin

     64,039       86,094       19.8     73,536       22.2     38,088       21.0

Adjustments:

              

Depreciation expense

     24,595       33,065       7.6     24,599       7.4     12,908       7.1

Income tax expenses

     15,846       21,303       4.9     7,524       2.3     3,520       2.0

Interest expense

     2,275       3,058       0.7     2,893       0.9     1,128       0.6

Interest income

     (442     (594     (0.1 %)      (465     (0.1 %)      (268     (0.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA and EBITDA margin

     106,313       142,926       32.9     108,087       32.7     55,376       30.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     For the Six Months Ended June 30,  
     2021     2020  
     US$     S$     Margin     S$     Margin  
     (in thousands, except percentages)  

Revenue

     187,174       251,637                209,280           

Profit for the period and net profit margin

     33,296       44,763       17.8 %      38,524       18.4 % 

Adjustments:

          

Depreciation expense

     14,757       19,839       7.9     15,633       7.5

Income tax expenses

     7,464       10,034       4.0     9,769       4.7

Interest expense

     2,787       3,747       1.5     1,496       0.7

Interest income

     (129     (174     (0.1 %)      (245     (0.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA and EBITDA margin

     58,175       78,209       31.1 %      65,177       31.1 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Liquidity and Capital Resources

Capital Resources

Our primary sources of liquidity are cash flows generated from operating activities and borrowings under our credit facilities. For further details, see “Description of Certain Indebtedness.” As of June 30, 2021, we had S$81.2 million (US$60.4 million) of cash and cash equivalents, S$7.6 million (US$5.7 million) of fixed deposits and S$2.4 million (US$1.8 million) of pledged deposits out of which S$1.9 million (US$1.4 million) is used to secure the facilities described below.

Our cash needs are primarily for the funding of capital expenditures and working capital.

We incur capital expenditures primarily for the expansion of offices, including for fixtures and furnishings for both new offices and existing offices. During the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, we incurred capital expenditures of S$19.7 million, S$29.0 million, S$18.2 million, S$7.2 million and S$18.3 million, respectively. We principally source the funds for our capital expenditures from internally generated cash from operations.

Our primary working capital requirements arise typically from the timing gap between our payroll-related obligations, office and equipment lease, statutory payments and contributions, bills for capital expenditures and the invoicing and collection of fee income from our clients.

We believe that our available cash and cash equivalents and cash flows expected to be generated from operations will be adequate to satisfy our current and planned operations for the next 12 months. Our ability to expand and grow our business in accordance with our current plans and to meet our long-term capital requirements will depend on many factors, including the rate, if any, at which our cash flows increase, and the availability of public and private debt and equity financing. To the extent we pursue one or more significant strategic acquisitions, we may incur debt or issue equity to finance any such acquisitions. If we issue equity securities in order to raise additional funds, substantial dilution to existing shareholders may occur. If we raise cash through the issuance of indebtedness, or the refinancing of our existing credit facilities, we may be subject to additional contractual restrictions on our business.

Cash Flows

The following table summarizes our cash flows for the years ended December 31, 2018, 2019 and 2020 and for the six months ended June 30, 2020 and 2021.

 

     For the Six Months
Ended June 30,
    For the Year Ended
December 31,
 
     2021      2020     2020     2019     2018  
                              (Restated)  
     (S$ in thousands)  

Net cash from operating activities

     53,505        83,944       130,484       76,044       37,320  

Net cash used in investing activities

     (16,006      (7,228     (23,682     (27,627     (20,863

Net cash used in financing activities

     (15,540      (1,962     (83,274     (36,655     (10,680
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in cash and cash equivalents

     21,959        74,754       23,528       11,762       5,777  

Effect of exchange rate changes on balance of cash held in foreign currencies

     (604      736       359       185       (71

Cash and cash equivalents at the beginning of the period/year

     59,807        35,920       35,920       23,973       18,267  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of the period/year

     81,162        111,410       59,807       35,920       23,973  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

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Net cash from operating activities

Net cash from operating activities for the six months ended June 30, 2021 was S$53.5 million (US$39.8 million), primarily comprising profit before income tax of S$54.8 million, adjusted for non-cash items including depreciation expense of S$19.8 million, a decrease in other receivables of S$1.2 million primarily due to receipts of government grants in Singapore and decrease in down-payment for fitting out of new office space partially offset by an increase in trade receivables of S$10.2 million primarily due to increase in overall revenue, increase in contract assets of S$4.8 million, consisting of unbilled invoices for services performed, and a payment of income taxes of S$11.7 million.

Net cash from operating activities in the year ended December 31, 2020 was S$130.5 million (US$97.1 million), primarily comprising profit before income tax of S$107.4 million, adjusted for non-cash items including depreciation expense of S$33.1 million; a decrease in trade receivables of S$19.1 million primarily due to faster collection of outstanding trade receivables as a result of tightened credit controls in view of the COVID-19 pandemic situation and an increase in other payables of S$9.5 million primarily related to accrued employee benefit expenses and accrued other operating expenses as a result of the increased demand on staffing and other operating requirements, partially offset by an increase in contract assets of S$20.1 million, consisting of unbilled invoices for services performed towards the end of the year, and an increase in other receivables of S$5.0 million related to government grants and credit scheme subsidies in Singapore and deposits paid to landlords and contracts for the lease and fit out of new office space.

Net cash from operating activities in the year ended December 31, 2019 was S$76.0 million, primarily comprising profit before income tax of S$81.1 million, adjusted for non-cash items including depreciation expense of S$24.6 million; an increase in trade receivables of S$27.2 million primarily due to an increase in our revenue, an increase in contract assets of S$7.7 million, consisting of unbilled invoices for services performed towards the end of the year, and an increase in other receivables of S$3.2 million related to deposits paid to landlords and contracts for the lease and fit out of new office space and prepayment of professional fees, partially offset by an increase in other payables of S$9.8 million primarily related to accrued employee benefit expense and accrued professional fees.

Net cash from operating activities in the year ended December 31, 2018 was S$37.3 million, primarily comprising profit before income tax of S$41.6 million, adjusted for non-cash items including depreciation expense of S$12.9 million; an increase in contract assets of S$10.4 million, consisting of unbilled receivables, an increase in trade receivables of S$7.1 million in line with our revenue growth; and an increase in other receivables of S$4.1 million related to deposits paid to landlords and contracts for the lease and fit out of new office space, partially offset by an increase in other payables of S$4.5 million primarily related to accrued employee benefit expense.

Net cash used in investing activities

Net cash used in investing activities for the six months ended June 30, 2021 was S$16.0 million (US$11.9 million), primarily due to expansion of our office space.

Net cash used in investing activities in the year ended December 31, 2020 was S$23.7 million (US$17.6 million), primarily comprising of S$17.3 million for the expansion of our office space and S$6.9 million for an increase in fixed deposits, relating to our credit facility with OCBC, partially offset by S$0.8 million from repayment of loan from an associate.

Net cash used in investing activities in the year ended December 31, 2019 was S$27.6 million, consisting primarily of S$25.9 million for the expansion of our office space, S$0.8 million for investment in other financial assets and S$0.8 million for an increase in fixed deposits, relating to our credit facility with OCBC.

Net cash used in investing activities in the year ended December 31, 2018 was S$20.9 million, consisting primarily of S$19.0 million for the purchase of plant and equipment relating to the expansion of our office space and S$1.9 million for an increase in pledged deposits, relating to our credit facility with OCBC.

 

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Net cash from financing activities

Net cash used in financing activities for the six months ended June 30, 2021 was S$15.5 million (US$11.6 million), primarily consisting of S$252.7 million in relation to the drawdown of bank loans, primarily the Credit Suisse Facility, which was offset by S$252.0 million with respect to distribution to our Founder, S$9.9 million for repayment of lease obligations and S$3.4 million related to the repayment of bank loans.

Net cash used in financing activities in the year ended December 31, 2020 was S$83.3 million (US$61.8 million), primarily consisting of S$73.5 million for dividends paid, S$14.2 million for repayment of lease obligations and S$6.1 million related to the repayment of a bank loan, partially offset by S$12.0 million in proceeds from the drawdown of a bank loan.

Net cash used in financing activities in the year ended December 31, 2019 was S$36.7 million, primarily consisting of S$17.0 million for dividends paid, S$10.5 million from the repayment of a loan to one of our directors, S$11.6 million for repayment of lease obligations and S$6.1 million related to the repayment of a bank loan, partially offset by S$10.0 million in proceeds from the drawdown of a bank loan.

Net cash used in financing activities in the year ended December 31, 2018 was S$10.7 million, primarily consisting of S$38.0 million related to acquisition of non-controlling interests of TDCX SG in 2018, S$30.4 million in proceeds from the drawdown of a bank loan and a S$6.2 million from the drawdown of a loan from one of our directors, partially offset by S$5.3 million for repayment of lease obligations and S$3.0 million for dividends paid.

Contractual Obligations

The following table sets forth our contractual obligations (including future interest payments) as of June 30, 2021.

 

                                                                                         
     As of June 30, 2021  
     Total      On
demand
within
1 year
     2-3 years      3-5
years
     More than
5 years
 
     (S$ in thousands)  

Lease commitments for leases of low-value assets

     2,983        1,958        1,022        2        1  

Other lease commitments

     33,395        15,123        13,364        4,908        —    

Capital commitments

     2,965        2,862        103        —          —    

Long-term debt

     286,366        16,238        268,812        1,316        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     325,709        36,181        283,301        6,226        1  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Seasonality

We are not subject to any material fluctuations in our revenue and operating results due to seasonality.

Quantitative and Qualitative Disclosures About Market Risk

Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in us incurring a financial loss. Our credit risk is primarily attributable to our cash and cash equivalents, trade receivables, contract assets and other receivables. Cash and cash equivalents are placed with credit-worthy financial institutions with high credit ratings assigned by international credit-rating agencies and accordingly we believe credit risk for our cash and cash equivalents is limited. We have adopted procedures in connection with

 

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extending credit terms to clients that involve monitoring client credit risk. Credit evaluations are performed on clients requiring credit over a certain amount. Before accepting any new client, we carry out basic research on the background of the new client and assess the potential client’s credit quality and set credit limits by client. As of December 31, 2020, the net carrying amount of our trade receivables, contract assets and other financial assets was S$36.9 million, S$46.8 million and S$12.9 million, respectively. As of June 30, 2021, the net carrying amount of our trade receivables, contract assets and other financial assets was S$46.8 million, S$50.9 million and S$10.8 million, respectively. We maintain allowances against receivables and contract assets. Credit losses and write-offs of accounts receivable balances have historically not been material to our consolidated financial results.

Foreign Currency Risk

We have operations in Singapore, Malaysia, Philippines, Thailand, China, Japan and Spain. Given that transactions occur in various foreign currencies, fluctuation in exchange rates of foreign currencies relative to the Singapore dollar may impact our consolidated financial statements.

The sensitivity analysis below includes only significant outstanding foreign currencies denominated monetary items. If the United States dollar strengthens/weakens by 5% against the relevant functional currencies, profit or loss will increase/(decrease) by:

 

    

For the Six Months Ended
June 30,

     For the Year Ended
December 31,
 
     2021      2020      2019      2018  
     (S$ in thousands)  

U.S. dollar

     2,658        2,815        1,475        1,175  

We also generally try to include foreign currency risk provisions when negotiating our master services agreements and/or statements of work that allow us to renegotiate our billing rates if the average of the relevant local currency fluctuates beyond a specified range compared to the average of our client’s specified currency. The contracted range is typically between +/- 1% and +/- 5%. These rate revisions take place periodically, usually at the time of contract.

Interest Rate Risk

Interest rate risk arises from the potential changes in interest rates that may have an adverse effect on us in the current reporting period and future years. As of June 30, 2021, our interest rate risks relate to floating rates interest credit facilities based in the prevailing cost of capital by the lenders or LIBOR plus a margin between 1.25% to 3.45%. See “Description of Certain Indebtedness.”

The sensitivity analysis below is based on the exposure to interest rates for non-derivative instruments at the end of the reporting period and, for floating rate instruments, the stipulated change taking place at the beginning of the financial year and being held constant throughout the reporting period. A 50 basis point increase or decrease represents management’s assessment of a reasonably possible change in interest rates. As of June 30, 2021, we estimate that a 50 basis point increase in interest rates would decrease our profit before tax by S$1.5 million annually.

Liquidity Risk

Liquidity risk is managed by matching the payment and receipt cycle. We aim to maintain sufficient cash and cash equivalents and internally generated cash flows to finance our operations. We minimize liquidity risk by keeping credit lines (including working capital borrowings) available. As of December 31, 2018, 2019 and 2020 and six months ended June 30, 2021, our current assets exceeded our current liabilities by S$32.3 million,

 

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S$48.5 million, S$73.8 million and S$105.4 million, respectively. As of June 30, 2021, we have an undrawn revolving credit facility of S$1.9 million with a financial institution.

Inflation

Inflationary factors such as increases in the cost of our services and overhead costs may adversely affect our operating results. Wage inflation in Singapore, the Philippines, Malaysia, Thailand and elsewhere where we employ a significant number of employees could also lead to payroll increases, which may adversely affect our results of operations. A high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of profit margin and operating expenses as a percentage of revenues if the selling prices of our services do not increase in line with increases in costs.

Off-Balance Sheet Commitments and Arrangements

We have an operating lease commitment for low value assets of S$3.0 million and capital commitment for acquisition of plant and equipment of S$3.0 million as of June 30, 2021. We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any unconsolidated third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.

Critical Accounting Policies

The preparation of financial statements in conformity with IFRS requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs, expenses and other comprehensive income that are reported and disclosed in the financial statements and accompanying notes. These estimates are based on management’s best knowledge of current events, historical experience, actions that we may undertake in the future and on various other assumptions that management believes to be reasonable under the circumstances.

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our consolidated financial statements. Some of our accounting policies require higher degrees of judgment than others in their application.

We consider the policies discussed below to be critical to an understanding of our consolidated financial statements as their application places significant demands on the judgment of our management. You should read the following descriptions of critical accounting policies, judgments and estimates in conjunction with our consolidated financial statements and the notes thereto and other disclosures included in this prospectus. For more information on our policies with respect to financial assets and financial liabilities, see Note 3 of our Consolidated Financial Statements.

Revenue Recognition

We measure our revenue based on the consideration specified in a client contract and statement of work with a client. Revenue is measured based on the consideration specified in a contract with a client and recognized as and when control of a service is transferred to a client. We primarily enter into master service agreements, with our clients, which provide a framework for services and statements of work. These statements of work define the

 

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scope, timing, pricing terms and performance obligations for each individual campaign under the respective master service agreements. Our contracts with our clients have both fixed and variable components. The agreements typically specify a fixed rate per FTE that comes with either a variable price component or fee deduction that is based on meeting (or the failure to meet) certain key performance indicators. Based on the transaction price as set up in the agreement for each performance obligation, we will invoice our clients on a monthly basis as each performance obligation is satisfied after adjusting for fee deduction based on whether the Company meets (or the failure to meet) certain key performance indicators (where applicable) during that month. In general, we invoice our clients within five to 30 days from end of the month and receive payment within 30 to 90 days from the invoice dates. Revenues from omnichannel CX solutions, sales and digital marketing, content monitoring and moderation, and workspace and payroll services are recognized over time when the performance obligation under our client agreements and statements of work, are satisfied. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. A contract asset is recorded when revenue is recognized prior to invoicing and a contract liability is recorded when the Company invoices the clients prior to satisfying the performance obligations. Our contracts do not include a significant financing component.

The Company incurs certain costs such as personnel and travel costs, hiring, on boarding and training employees and capital expenditures incurred in infrastructure, renovation and leases of office space which are incidental to its contracts with clients. IFRS 15 requires an entity to recognize an asset from the costs incurred to fulfil a contract with a client if the costs are not within the scope of another IFRS standard, and only if those costs meet all the following criteria:

 

   

the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify;

 

   

the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and

 

   

the costs are expected to be recovered.

The Company recognizes costs as expenses as they are incurred when they relate to personnel and travelling, hiring and training employees when they do not meet the criteria above. In cases where the start-up costs to fulfil a contract include capital expenditures in infrastructure, renovation and leases of offices space, those costs are recorded based on the guidance included in IAS 16 Property Plant and Equipment and IFRS 16 Leases.

Income Tax

Our income tax expense represents the sum of the tax currently payable and deferred tax. Our tax currently payable is based on taxable profit for the year or period. Taxable profit differs from profit as reported in the consolidated statement of profit or loss and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. Our liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where we operate by the end of the reporting period.

A provision is recognized for those matters for which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. The assessment is based on the judgement of tax professionals within the Group supported by previous experience in respect of such activities and in certain cases based on specialist independent tax advice.

Our deferred tax is recognized on the differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax

 

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liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries, except where we are able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realized based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which we expect, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and we intend to settle its current tax assets and liabilities on a net basis.

Current tax and deferred tax are recognized as an expense or income in profit or loss.

Leases

We lease the premises where we operate our business. We assess whether a contract is or contains a lease, at inception of the contract. We recognize a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, we recognize the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

Our lease liability is initially measured as the present value of the lease payments that are not paid at the commencement date. The lease payment shall be discounted using the interest rate implicit in the lease, as the interest rate implicit in the lease are not readily determined, we use the incremental borrowing rate. Our incremental borrowing rate is determined based on interest rate of our bank loan if we would have to pay to borrow over a similar term and with a similar security the funds necessary to obtain an asset of a similar value of the right-of-use asset in a similar economic environment.

Lease payments included in the measurement of the lease liability comprise:

 

   

fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

 

   

the amount expected to be payable by the lessee under residual value guarantees;

 

   

the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

 

   

payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

 

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The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. We remeasure the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

 

   

the lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

 

   

the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

 

   

a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever we incur an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized to the extent that the costs relate to a right-of-use asset.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that we expect to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are presented as a separate line in the consolidated statement of financial position.

We apply IAS 36 Impairment of Assets to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss. For the years ended December 31, 2018, 2019 and 2020, we did not record any impairment related to our right-of-use assets.

Internal control over financial reporting

Our internal controls relating to financial reporting have not kept pace with the expansion of our business. Our financial reporting function and system of internal controls are less developed in certain respects than those of similar companies and may not provide our management with as much or as accurate or timely information. The Public Company Accounting Oversight Board, or PCAOB, has defined a material weakness as “a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis.”

In the course of auditing our consolidated financial statements as of and for the years ended December 31, 2018, 2019 and 2020, we and our independent registered public accounting firm identified three material weaknesses in our internal control over financial reporting as of December 31, 2018, 2019 and 2020, in accordance with the standards established by the Public Company Accounting Oversight Board of the United States. The material weaknesses identified related to:

 

(i)

Inappropriate segregation on several control processes, which includes the review and approval of journal accounting entries;

 

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(ii)

Lack of adequate controls over access rights to several IT systems, which includes excessive and conflicting rights granted to several accounting personnel; and

 

(iii)

Insufficient financial reporting and accounting personnel with appropriate IFRS knowledge to prepare and review statement of cash flows relating to acquisition transaction in accordance with IFRS. Such material weakness resulted in an error on the classification of the cash consideration paid to acquire non-controlling interest, which has been rectified by restatements of the consolidated statement of cash flows for the year ended December 31, 2018 to reclassify the cash consideration paid to acquire non-controlling interest from investing activities to financing activities. For details, please refer to note 35 to TDCX’s consolidated financial statements for the years ended December 31, 2018, 2019 and 2020 included elsewhere in this registration statement.

See “Risk Factors—Risks Related to our Business and Industry—If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our ADSs may be materially and adversely affected.”

As a result of the foregoing, we developed several key remedial and improvement measures to strengthen our accounting operations and financial reporting functions. The measures that we are implementing include:

 

   

Removing excessive and conflicting rights granted in our IT systems and in some cases where access is required, compensating controls are being put in place;

 

   

Implementing the segregation of duties and/or controls with respect to payroll and procurement processes and review of the controls in the area of finance, human resource and operations to ensure appropriate segregations are in place;

 

   

Where applicable, hired additional competent and qualified finance personnel to ensure required segregation of duties can be implemented;

 

   

Implementing enhanced and robust user access rights to critical systems to minimize the exposure to conflicts of interest and/or the circumvention of approvals;

 

   

Implementing a financial reporting platform and system that is planned to be integrated with the financial operational system; and

 

   

Setting up an internal audit function to carry out audits and reviewing the internal accounting controls, processes and business practices within financial operations of the Company and its subsidiaries.

We intend to remediate these material weaknesses in our internal control over financial reporting by the end of the first full calendar year after the completion of this offering. However, while we currently intend to continue implementing these measures, we cannot assure you that we will be able to continue implementing these measures in the future within such timeline or at all, or that we will not identify additional material weaknesses in the future.

We will continue to implement measures to remediate our internal control deficiencies in order to meet the deadline imposed by Section 404 of the Sarbanes Oxley Act. We may incur significant costs in the implementation of such measures. However, the implementation of these measures may not fully address the deficiencies in our internal control over financial reporting. See “Risk Factors—Risks Related to Our Business and Industry—If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our ADSs may be materially and adversely affected.”

As a company with less than US$1.07 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified

 

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reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, in the assessment of the emerging growth company’s internal control over financial reporting.

Recently Issued Accounting Pronouncements

For a description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows, see Note 2 to our audited consolidated financial statements included elsewhere in this prospectus.

 

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HISTORY AND CORPORATE STRUCTURE

Our history originates with the founding of Teledirect Pte Ltd, which is now known as TDCX (SG) Pte. Ltd., by our Executive Chairman and Chief Executive Officer, Laurent Junique in 1995 in Singapore.

In 1997, WPP Singapore Pte Ltd, part of the WPP plc group, a London public company which is a provider of communications and advertising services globally, invested in Teledirect Pte Ltd by acquiring 40% of its shares.

In 1999, Oasix Pte Ltd was incorporated as a private company limited by shares under the Companies Act, Chapter 50 of Singapore. On May 17, 2001, Oasix Pte Ltd changed its name to Agorae Pte Ltd. In September 2018, Agorae Pte Ltd acquired the 40% of issued share capital of Teledirect Pte Ltd held by WPP Singapore Pte Ltd. In January 2019, our Founder reduced his 60% equity interest in Teledirect Pte Ltd through a cancellation of his shares in Teledirect Pte Ltd and Teledirect Pte Ltd became a wholly-owned subsidiary of Agorae Pte Ltd. On December 3, 2019, Agorae Pte Ltd changed its name to TDCX Holdings Pte. Ltd. On December 4, 2019, Teledirect Pte Ltd changed its name to TDCX (SG) Pte. Ltd.

On April 16, 2020, TDCX was incorporated as an exempted company in the Cayman Islands to acquire our Founder’s shareholder’s interest in TDCX KY, which it did on March 23, 2021 through a series of transactions contemporaneous with the drawdown of the Credit Suisse Facility. See “Description of Certain Indebtedness— Credit Suisse Facility.” TDCX KY had previously acted as the holding company for our subsidiaries.

We operate our business through a number of direct and indirect subsidiaries. As of the date of this prospectus, we have subsidiaries in Singapore, the Philippines, Malaysia, Thailand, China, Japan, Spain, India, Colombia, Korea and Romania.

The chart below sets out our corporate structure as of the date of this prospectus.

 

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(1)

Effective ownership (voting powers).

(2)

Dormant entity.

 

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Our registered office is located at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our principal executive office is located at 750D Chai Chee Road, #06-01/06 ESR BizPark @ Chai Chee, Singapore, Singapore 469004. Our telephone number at this location is (65) 6309-1688. Our principal website address is www.tdcx.com. The information contained on our website does not form part of this prospectus.

 

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INDUSTRY OVERVIEW

The Outsourced Services Market

Outsourcing is the process of hiring a third party service provider to manage IT and business processes. This enables an organization to focus on its main business operations and function. There are three major categories of outsourcing services:

Information & Technology Outsourcing, or ITO: Providing transactional-type IT and IT-related functions such as data center hosting, managed services, disaster recovery and business continuity, software development, application maintenance services, and technology and consulting services.

Knowledge Process Outsourcing, or KPO: Providing specialized and complex knowledge services for internal and external parties that could be outsourced, offshored or centralized to enhance a company’s competitive advantage in terms of costs and economies of scale. Examples of KPO services include legal services, engineering R&D, pharmaceutical R&D, market and consulting research, data analysis, and taxation support.

Business Support Services, or BSS: Involves the contracting of operations and responsibilities of specific business functions (or processes) such as payroll, customer service, accounting and data recording to a third-party service provider.

Key BSS market segments and business functions:

 

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Market share of outsourced BSS industry

Within the outsourced BSS industry, CX services market is expected to become the largest segment in 2025E with 29.5% of the market share driven by the growing demand for customer experience center and services from new economy, banking and financial services industry, telecommunications, retail, and government verticals.

Outsourced BSS Market Size by Segment, Southeast Asia, 2020 and 2025E

 

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Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

BSS providers may also specialize in one or more specific customer industry verticals:

Key customer industry verticals

 

•  Banking & Financial Services

  

•  Travel & Transportation

•  Insurance

  

•  Healthcare

•  Manufacturing

  

•  Pharmaceutical

•  Telecommunications

  

•  Retail & Wholesale

•  Energy and Utility

  

Key trends in the BSS industry

Globally, the BSS industry is continuing to evolve beyond resource expansion and cost arbitrage solutions. The industry is now focused on driving business outcomes and creating value for customers. Enterprises are looking to BSS providers to drive growth by streamlining their operations, reducing costs, improving customer centricity, maintaining compliance and regulatory policies, identifying new areas of growth, improving profitability, and providing advanced analytical capabilities and technical expertise.

While the adoption of technology in the BSS industry has enabled the automation of simpler tasks, there remains a significant portion of higher value-added workstreams that remain dependent on human expertise. In today’s consumer-centric marketplace, businesses are dealing with customers who demand more personalized, relevant, and engaging experiences. For example, content moderation is used to strengthen cultural affinity, customer experience, and customer loyalty, and with the increasing complexity of the work and the rising regulatory oversight requirements, the need for human expertise will continue to grow significantly both in content moderation as well as other BSS verticals.

 

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BSS providers are also diversifying their geographic coverage to focus on emerging markets in Southeast Asia, Eastern Europe, and Latin America. In the Asia Pacific region, India, China, and the Philippines, followed by Malaysia are strong market contenders. These countries provide a multilingual and multicultural workforce, a significant existing shared services presence, an experienced talent pool, and proven expertise supported by various government incentives.

Outsourced BSS industry size

Outsourcing is becoming one of the approaches companies use to navigate the challenging competitive environment. Companies that preferred to keep the bulk of their core operations in-house are now starting to see the advantages of outsourcing. Additionally, as companies struggle to manage their legacy systems in-house, they are looking to transform their business processes through partnerships with outsourcing service providers. These key factors are expected to drive the growth of outsourced BSS globally at a CAGR of 4.2% from 2016 to 2025E, and in Southeast Asia at a CAGR of 5.3% over the same period.

Market Size of Outsourced BSS in the Traditional and New Economy Industries, Global, 2016-2025E

 

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Source: Frost & Sullivan.

Note: Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

Customer Experience services industry

A subset of the BSS industry, the CX services industry involves customer services (in-bound) from help-desk and general enquiries, to more complicated tasks such as CRM management, selling, marketing, lead generation, presales/ post sales assistance, content moderation, and cross selling services (out-bound).

Dynamics of the CX Services Industry:

 

   

An increased focus on CX is driving enterprises to outsource their CX services to leverage third party provider capabilities and expertise.

 

   

The outsourced CX market has evolved to include key strategic elements beyond the traditional contact centers such as CX consulting and digital CX services.

 

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Enterprise buyer expectations have evolved, as buyers increasingly look to partnering with service providers who embrace customer-centricity and proactively talk about the application of innovative solutions such as CX consulting, omnichannel platforms, automation, and analytics in CX centers.

 

   

Customer care services are delivered through multiple channels including traditional channels such as the telephone and new channels such as chat and social media.

 

   

Customer expectations are rapidly changing with ready access to information, influence of online experiences and adoption of new technologies. This forces organizations to develop new interactive models that deliver deeper personalized service and improved customer care, with CX services at the forefront of this trend. Some of the relevant technologies being implemented include cognitive artificial intelligence (AI), real-time analytics and chat bots to improve business processes, with the use cases to (i) automate repetitive tasks, (ii) enhance predictive analytics and (iii) provide better contextualization for agents to provide better customer experiences.

 

   

In addition, the growing impetus for modernizing the customer experience to maintain competitive differentiation, rising usage for non-voice channels in addition to other channels of communication, and building of efficient customer experience centers through the use of machine learning and AI technologies are driving the demand for CX services in the new economy industry.

Key drivers of growth in the CX services industry

Investment in digital transformation initiatives

 

   

The penetration of outsourced business support services in the traditional economy continues to steadily gain traction as companies expand the scope of the business functions they outsource, particularly as it relates to their digital transformation journey.

 

   

Customer interactions are no longer standalone activities, as customers are demanding a more comprehensive and consistent experience. Within digital transformation initiatives, building a differentiated CX through channel integration and contextual responses will be the leading requirement for CX-centered innovations.

 

   

BSS and CX services are transforming organizational processes by enabling new technologies such as automation and analytics.

Achieving operational excellence

 

   

Enterprises outsource their business processes to not only streamline operations and lower costs but also to have greater efficiencies from predictive analytics, customized solutions, and collaborative engagements. Enterprises will look to service providers to achieve operational excellence and process efficiencies through intelligent automation, advanced analytics, and alternate delivery models like business process as a service.

Focusing on core business activities

 

   

Setting up and operating in-house CX centers can be difficult and time-consuming. By outsourcing CX centers, businesses can focus on their products, day-to-day operations, and business plans, without having to worry about customer service and experience.

Providing better customer support

 

   

Customers have more options than ever before; by taking a proactive approach, providing 24/7 support service, and using multiple communication channels, enterprises can provide better services for their customers and increase customer satisfaction.

 

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Additionally, enterprises are able to provide better products and services to customers with a greater understanding of consumer behavior and feedback through analysis of customer interactions and needs.

Outsourced CX services industry size

Organizations in the traditional economy are going through a digital transformation and are rethinking the way business is done. Customer-centric organizations are embracing the pivotal role outsourcers play in elevating customer experience. Building a differentiated CX through channel integration and contextual responses, implementation of a chatbot or conversational AI, and leveraging analytics for prediction and AI, will be the leading requirements for organizations looking to outsource their CX operations. Organizations in the new economy industries are partnering with outsourcing CX providers to remain agile to disrupt their competition while creating a differentiated CX and providing end-to-end customer engagement to set them apart from competitors.

Impact of COVID-19 pandemic on CX services

CX is gaining prominence due to the unexpected challenges brought on by the COVID-19 pandemic. Efficient customer service is more crucial than ever as a positive interaction with a company can create a lasting impact on brand loyalty. The speed at which the COVID-19 pandemic spread has severely affected people, businesses, and economies and has had varying impacts on different verticals. For instance, the airlines, hospitality, and tourism industries were adversely impacted while the eCommerce and healthcare industries witnessed significant growth.

The challenges brought on by the pandemic have also encouraged CX centers to innovate and embrace digital technologies to deliver consistent customer service. Reducing employee presence at work places, utilizing work at home agents (WAHA), and transferring operations to other less affected locations were some of the immediate measures taken to ensure business continuity. Organizations have had to adjust to new ways of functioning as many agents were relocated to work-from-home. This required businesses to deploy new technologies to handle increased call volumes and prioritize tickets and ensure data privacy and security.

The COVID-19 pandemic has expedited digital transformation investments in self-service tools, chatbot, cloud solutions, and rightshoring CX services. Service providers with skilled agents (both onshore and offshore), best-in-class technology, delivery models including on-premises and cloud, and digital transformation consulting competencies were able to deliver on the changes brought on by the pandemic quickly.

Impact of 5G technology on CX services

The new generation of 5G wireless technology promises to change how people use the internet through lightning-fast connection speeds, lower latency, and the ability to connect one million devices per square kilometer. This increased reliability, performance and efficiency is considered to be a massive advantage to companies that have to meet ever-changing customer expectations. This would also add to the proliferation of other technologies, including Internet of Things (IoT), augmented reality (AR) and virtual reality (VR), big data, and cloud computing. 5G is expected to bring about the following changes to CX services:

 

   

Heightened consumer expectations: With improved reliability, performance and efficiency arising due to 5G, customers will develop new expectations from their brand interactions, and companies need to understand the need for speed and seamless mobile transactions to respond to customers’ feedback in real-time.

 

   

Widespread access to video support: With lower latency and faster network speeds, CX representatives can troubleshoot technical issues through screen-sharing and video chat to provide a more efficient customer service which is a critical part of the overall customer experience. This can also potentially reduce the number of product returns or in-home technician visits.

 

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Increased number of smart devices and ability to troubleshoot via self-service: 5G will supercharge the growth of the IoT and smart devices market and allow for better at-home troubleshooting. For instance, sensors in appliances could allow companies to schedule for servicing and to guide customers through simple troubleshooting steps.

 

   

Proliferation of AR/VR capabilities: Using 5G’s high speed and processing power, there will be a greater widespread use of AR/VR technology in the public domain. This can be used to boost interest in emerging concepts like virtual stores or an augmented reality on how a certain product will look like at home in real time. Customers will also use AR/VR to interact with chatbots and human agents alike for everything from shopping to technical support.

 

   

Higher big data processing power: 5G increases the volume of data that companies can collect to identify customer patterns and personalize CX. Based on greater convergence of IoT and customer data profiles, companies can harness the big data available and develop better customer support trends and develop in-store personalization.

Market Size of Outsourced CX Services in the Traditional and New Economy Industries, Global, 2016-2025E

 

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Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

Rise of the internet and New Economy and its Implications for the BSS and CX industries

Both regionally and globally, the rise of the internet and the connected New Economy has been a significant growth driver behind the BSS and CX industries in the past three to five years. The following points provide an overview of the key drivers behind the growth in internet and New Economy.

Increased adoption of internet and mobile usage transforming consumer behavior:

 

   

Internet and mobile usage has fundamentally changed consumer behavior driving the unprecedented growth of the New Economy industry. Users communicate, entertain themselves, and learn new skills using mobile phones. Increasingly, they also buy products, plan trips, and order food online.

 

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Growth in global urbanization rates is driving an increased adoption of the internet, and therefore resulting in greater consumer inclusion within the New Economy:

 

   

Growth in the urban population is driven by an overall population increase and by the upward shift in the percentage living in urban areas.

 

   

The United Nations estimates that the urban population in Southeast Asia will increase from 59.2% in 2015 to approximately 63.9% by 2024. This in turn will drive improved standard of living, higher productivity, higher wages, and higher purchasing capacity.

Changing demographics, particularly in Southeast Asia, to a larger youth population resulting in a shift in how consumers buy their products and spend their money:

 

   

The youth population, aged 15-29 years, is expected to increase from 138.5 million in 2015 to 141.8 million in 2024.

 

   

This youth population grew up with devices that allowed them to communicate with their friends and family, work on school projects, entertain themselves with games, videos and music, and discover information that aids them in their studies. As a result of their familiarity and reliance on technology and a connected experience, the youth population has become a natural and growing part of the New Economy.

In 2020, half of the world’s 4.8 billion internet users are in Asia, and by 2030, approximately 60% of the global middle class is expected to live in Asia. To this end, the youth, urban, middle class, and affluent consumers are more digitally engaged further propelling the New Economy era.

The ‘New Economy’

The New Economy refers to high growth industries that are on the cutting edge of technology and are the driving forces of economic growth.

The industry is seen as an evolution of the existing traditional economy aided by technology advancements and innovation. New Economy companies involved in technology, such as Alibaba, Amazon, Apple, Google (Alphabet), Facebook, Tencent, Microsoft and Tesla, have overtaken many other companies in terms of market capitalization.

 

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Rise of New Economy companies

Top 10 largest companies by market capitalization globally, December 2020

 

Rank

  

Name

   Market
capitalization

(US$bn)
 

1

   Apple      2,260  

2

   Saudi Aramco      1,870  

3

   Microsoft      1,680  

4

   Amazon      1,630  

5

   Alphabet      1,190  

6

   Facebook      778  

7

   Tencent      698  

8

   Tesla      669  

9

   Alibaba      630  

10

   Berkshire Hathaway      544  
     

 

 

 

Total

     11,948  

Total market capitalization of New Economy companies

     9,534  

New Economy companies as % of top 10

     79.8 % 

 

  

New Economy companies

  

Source: Bloomberg.

Top 10 largest companies by market capitalization globally, December 2015

 

Rank

  

Name

   Market
capitalization

(US$bn)
 

1

   Apple      587  

2

  

Alphabet

     528  

3

   Microsoft      443  

4

   Berkshire Hathaway      325  

5

  

Exxon Mobil

     325  

6

  

Amazon

     317  

7

  

Facebook

     296  

8

   General Electric      294  

9

  

Johnson & Johnson

     284  

10

   Wells Fargo      278  
     

 

 

 

Total

     3,677  

Total market capitalization of New Economy companies

     2,171  

New Economy companies as % of top 10

     59.0

 

  

New Economy companies

  

Source: Bloomberg.

 

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Top 10 largest companies by market capitalization globally, December 2010

 

Rank

  

Name

   Market
capitalization

(US$bn)
 

1

   Exon Mobil      369  

2

   PetroChina      303  

3

   Apple      296  

4

   BHP Billiton      243  

5

   Microsoft      239  

6

   Industrial & Commercial Bank of China      233  

7

   Petrobras      229  

8

   China Construction Bank      222  

9

  

Royal Dutch Shell

     208  

10

   Nestle      203  
     

 

 

 

Total

     2,545  

Total market capitalization of New Economy companies

     535  

New Economy companies as % of top 10

     21.0

 

   New Economy companies   

Source: Bloomberg.

E-commerce

The E-commerce market is experiencing a burst of demand as a result of the rapid adoption and the fundamental shifts in consumer behavior. Consumers today purchase a wide range of items online, ranging from big ticket items to lower-cost but more frequent purchase items such as groceries, personal care, and apparel. This trend has seen a number of players in Southeast Asia emerge as e-commerce unicorns: Bukalapak, Lazada, Shopee, and Tokopedia.

Market Size of Retail Sales, Global, Southeast Asia, China, Japan and Europe, 2016-2025E

 

 

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Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

 

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Market Size of Retail E-commerce Sales, Global, Southeast Asia, China, Japan and Europe, 2016-2025E

 

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Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

Online marketplaces have become extremely popular among product vendors, marketers, and consumers for selling, advertising, and shopping, respectively. The global retail e-commerce sales market amounted to US$1.8 trillion in 2016 and increased to US$3.4 trillion in 2020 with a CAGR of 18.2%. It is further expected to increase from US$3.9 trillion in 2021 to US$6.7 trillion in 2025, at a CAGR of 14.5%.

 

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Digital Advertising

The digital advertising format includes e-mail advertising, social media advertising, search engine advertising, and mobile advertising. AdTech companies such as AdAsia, Nugit, CtrlShift, and AdEasy are all seeing a boost in funding.

Market Size of Advertising Spend, Global, Southeast Asia, China, Japan and Europe, 2016-2025E

 

 

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Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

Market Size of Digital Advertising Spend, Global, Southeast Asia, China, Japan and Europe, 2016-2025E

 

LOGO

Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

 

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Digital advertising spend, particularly through the mobile platform, is expected to surge as advertisers are looking to increasingly capitalize on the changing consumer patterns of prolonged mobile phone usage to reach out to more target customers at a lesser cost. The growing mobile and internet penetration, particularly the use of smartphones, has resulted in a significant increase in online advertising and digital marketing spend.

The Sharing Economy

The Sharing Economy is a model defined as a peer-to-peer (P2P) based activity of acquiring, providing, or sharing access to goods and services that is often facilitated by a community based online platform connecting buyers and sellers.

Market Size of Sharing Economy Sector (by Transaction Value), Global, Southeast Asia, China, Japan and Europe, 2016-2025E

 

 

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Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

 

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Market Size of Selected Traditional & Sharing Economy Markets (by Transaction Value), Global, 2016-2025E

 

 

LOGO

Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

Consumers are showing a robust appetite for the sharing-based services ranging from daily commuting to renting workspaces or booking places to stay during travel or holidays. By 2025, the global Sharing Economy is expected to contribute approximately 20% of the total sharing and traditional rental economy, led by China with more than 40% sharing economy penetration.

Key components of the Sharing Economy:

Accommodation sharing platforms

Accommodation sharing platforms connect homeowners with users who need a place to stay when they are travelling or renting for a short period of time via an online platform. Such companies include Airbnb, HomeAway, FlipKey, VRBO and HomeExchange.

The sharing accommodation market refers to the transactional value generated from such online short-term rental platforms. High internet penetration and excellent living experiences led the global sharing accommodation market size to grow during 2016 to 2019. In 2020, global travel demand declined significantly due to the pandemic crisis, causing the sharing accommodation market size to shrink to US$27.6 billion (CAGR of -1.7% from 2016 to 2020). This market is further expected to reach US$88.5 billion by 2025, growing at a CAGR of 18.4% between 2021 and 2025.

The sharing accommodation market in Southeast Asia is forecast to reach US$1.4 billion in 2025, growing at a CAGR of 23.6% between 2021 and 2025. Overall the sharing accommodation market will continue to grow at a faster pace than the traditional rental economy during the economy recovery period, with family travel and the millennial travelers being the key drivers.

 

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Sharing transportation platforms

Sharing transportation platforms primarily refer to online ride hailing companies, which mobilize passenger vehicles to provide a more convenient and efficient transportation choice for users via an online platform.

Rapid and successful commercialization of this ridesharing concept has not only nurtured new businesses such as Uber, Lyft, Grab, Gojek, Bolt, and DiDi, but has also brought a booming growth during 2016 to 2019. In 2020, travelling and commuting demand decreased due to the lockdown measures taken by governments worldwide and efforts by individuals to self-quarantine to control the pandemic spread, which led to the market shrinking to US$106.4 billion (CAGR of 11.9% from 2016 to 2020). Global sharing transportation is expected to further reach US$274.8 billion by 2025, growing at a CAGR of 15.4% between 2021 and 2025. This will be driven by improvements in internet penetration and mobile connectivity, increased usage, higher demand and value-add services.

Southeast Asia represents a substantial and viable market for ridesharing platform enterprises. The ridesharing industry in Southeast Asia is forecast to reach US$22.1 billion in 2025, growing at a CAGR of 18.0% between 2021 and 2025.

Sharing workspace platforms

Sharing workspace platforms primarily refers to co-working space rentals. Co-working space operators operate and lease a workspace which multiple lessees share, creating a community in the workspace. Examples of such platforms include WeWork, Kr Space, Regus, Nextdoor, and ReWork.

The global sharing workspace market was US$31.0 billion in 2020, and will grow at a CAGR of 26.6% from 2021 to 2025 to US$115.7 billion by 2025. This will be driven by an increased market demand from SMEs, startups, IT companies, and freelancers, as well as more revenues from value-add services provided.

The sharing workspace platform is expanding rapidly in Southeast Asia due to its tech-savvy population and the growing number of small enterprises and startups seeking non-traditional office structures. The sharing workspace market in Southeast Asia is still in the nascent stage, approximately US$1.1 billion in 2020, and is forecast to reach US$4.7 billion in 2025, growing at a CAGR of 30.9% between 2021 and 2025.

Online gaming

Online games are video games that are either partially or primarily played through the internet or any other computer network available. Online game can be categorized into three types, namely PC client games, PC web games, and mobile games.

Driven by the development of internet infrastructure and the increasing number of global game players, the global online gaming market has experienced solid growth in the past few years, reaching US$126.7 billion revenue in 2020 from US$70.8 billion revenue in 2016, representing a CAGR of 15.6% from 2016 to 2020. The global online gaming market is expected to reach US$200.5 billion in 2025, at a CAGR of 9.3% from 2021 to 2025.

The online gaming market in Southeast Asia has experienced rapid growth in the past few years, with the market size having reached US$4.9 billion in 2020, representing a CAGR of 28.3% from 2016 to 2020, which was mainly driven by the continuous increasing penetration rate of smartphones and accessibility to internet. The Southeast Asia market is expected to reach US$8.3 billion by 2025, growing at a CAGR of 9.9% between 2021 and 2025.

Fintech

Fintech refers to utilizing advanced technologies, such as Artificial Intelligence (AI), blockchain, cloud computing, big data analytics and IoT in financial industry, to increase the efficiency in financial risk

 

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management, lower marketing cost of financial products, reduce homogeneous competition among financial institutions, recommend valuable suggestions to investors and provide conveniences to people’s daily life (e.g. digital payment).

The rapid development of the global financial industry led to a booming growth rate of the Fintech market from 2016 to 2019. However, in 2020, the growth of the Fintech market slowed down due to a decrease in consumption and borrowings as a result of the impact on the global economy caused by the pandemic crisis. The Fintech market was US$68.1 billion in 2016 and US$163.8 billion in 2020 and is expected to grow to US$491.8 billion in 2025, at a CAGR of 22.4% from 2021 to 2025, driven by more applications to be implemented in financial industry.

The Fintech market in Southeast Asia has witnessed rapid growth, as countries such as Singapore with an advanced financial infrastructure and system are preferred by investors and entrepreneurs to develop Fintech. Moreover, changes in people’s consumption behavior such as cashless payment and online shopping has further driven the Fintech market development. The market is expected to grow at a CAGR of 31.6% during 2021 to 2025, reaching US$3.0 billion.

Outsourced BSS industry growth—Traditional vs New Economy clients

Outsourced BSS industry size for Traditional and New Economy industries

The Traditional Economy industries are the largest segment of the outsourced BSS market. Traditional Economy clients utilize outsourced BSS to improve their operating cost efficiency and leverage the operational expertise of specialized outsourced BSS providers to deliver value-added services which cannot be managed in-house.

Penetration of outsourced BSS industry in Southeast Asia is expected to grow from 22.5% of the total BSS spend in 2020 to 24.1% in 2025. Outsourced BSS in the Traditional Economy continues to steadily gain traction as organizations expand the scope of the business functions they outsource, particularly, as part of their digital transformation journey.

The New Economy industries are fast becoming a powerful growth engine for the BSS industry as companies in this industry are increasingly partnering with service providers to grow exponentially as they focus on expansion into new markets and evolve to provide new products and services. The market is further driven by the growing number of digital advertising, e-commerce, and sharing platform, online gaming and fintech startups.

Additionally, the outsourcing BSS market in New Economy industries is evolving from demand for low complexity work to high value strategic services. Outsourcing a variety of functions including customer care, content management, content moderation, advertising campaign management, sales support services, and other back office support services is growing as service providers deliver the best service at a fraction of the cost. Outsourced BSS companies are also able to help companies meet their strategic goals to improve customer relationships and enhance customer experience journeys by offering sophisticated CX solutions.

Outsourcing is quickly becoming the preferred way for New Economy companies to grow in a competitive environment as service providers have the expertise and capabilities to provide personalized services at lower costs. Outsourcing also gives New Economy companies a competitive advantage as they can remain agile and scale at a fraction of the cost of building in-house resources and capabilities.

 

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Market Size of Outsourced BSS in the Traditional and New Economy Industries,

By Delivery Locations in Southeast Asia, 2016-2025E

 

 

LOGO

Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

Penetration Ratio of Outsourced BSS vs. the Total BSS Spend in the Traditional and New Economy Industries, By Delivery Locations in Southeast Asia, 2016-2025E

 

 

LOGO

Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

 

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Outsourced CX industry growth—Traditional vs New Economy clients

Outsourced CX services for Traditional and New Economy industries

The outsourced CX services in the Traditional Economy will be driven by the growing demand for transformation of CX centers and delivery centers. Companies are discovering that their current voice-centric CX centers do not adequately support the level of service required to stay competitive. As CX continues to grow as a key competitive differentiator, the need for a platform that supports omnichannel customer service across all channels and touchpoints is becoming crucial.

New Economy companies are investing in creating differentiated customer experiences and providing end-to-end customer engagement that can enable them to set themselves apart from their competitors. A higher demand for modernizing CX to maintain competitive differentiation, rising demand for non-voice channels in addition to other channels of communication, and building efficient CX centers through the use of machine learning and AI technologies is driving the demand for outsourced CX services in the New Economy industry.

Market Size of Outsourced CX Services in the Traditional and New Economy Industries,

By Delivery Locations in Southeast Asia, 2016-2025E

 

 

LOGO

Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

 

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Penetration Ratio of Outsourced CX Services vs. the Total CX Services Spend in the Traditional and New Economy Industries, By Delivery Locations in Southeast Asia, 2016-2025E

 

 

LOGO

Source: Frost & Sullivan.

Note:

Many of the outsourced business services providers, including the Company, have global operations with delivery locations around the world and serve clients and client customers that are located both in the same country as the delivery location (onshore) and in countries different from the delivery location (offshore). Therefore, market sizing has been conducted by segmenting revenue based on the delivery location, which includes both onshore and offshore data. 2020 numbers are based on estimation and may be subjected to update.

CX industry and competitive landscape

The global outsourced CX market remains relatively fragmented, with global service providers competing with smaller, specialized service providers located in different regional market across North America, South America, Europe, Northern Africa and the Middle East, North Asia and Southeast Asia. Delivery centers in Southeast Asia and India predominantly serve customers in North America, Europe, and Australia. While the contribution of domestic business is comparatively smaller (less than 15%), locations like Malaysia are able to support multiple languages including English, Malay, Mandarin and several other Chinese dialects.

Despite the ongoing consolidation in the industry with a spate of mergers and acquisitions, the expanded scope of service capabilities driven by digital CX needs of enterprises is increasing the attractiveness of the CX market for not only incumbent service providers but also for niche service providers with differentiated digital and automation capabilities.

In Southeast Asia, the top 15 players are estimated to comprise just over 51% of market share by revenue in 2020. The top five outsourced CX service providers (excluding TDCX) by revenue in Southeast Asia are Teleperformance, Concentrix, Alorica, TTEC, and Telus with estimated market shares of 9.7%, 9.1%, 3.8%, 3.4% and 2.8% respectively. TDCX has 3.2% of the market share.

TDCX’s primary competitive landscape

As TDCX has pivoted its business to become a digital service support provider for new economy clients, its competitive landscape changed significantly from traditional CX companies to providers who rely more on technology-solutions. TDCX is contending in the CX market segment by providing high value-added services with strength in multi-lingual capabilities, content monitoring and moderation services, digital marketing services, and real-time data analytics capabilities to market-leading clients in the new economy sectors and traditional blue-chip clients. Competition varies across its key service lines and includes global leaders / traditional CX companies, blended voice, non-voice CX companies and omnichannel CX companies, ranging from CX centric players to ITO centric players. Among its key competitors in the CX segment, TDCX has a

 

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significantly greater share of new economy clients as a percentage of its total client base, with 87.8% of its 2020 revenue base coming from new economy clients, versus more than 7% for Teleperformance. In addition, TDCX has set itself apart from its key competitors by setting personnel retention as one of its top priorities. In 2018, 2019 and 2020, the annual voluntary attrition rate, measured by the number of employees that voluntary left the Company in a period divided by the average number of employees in such period, was 21.5%, 23.1% and 24.8%, respectively, compared to the industry average of 30% to 34% in APAC.

Based on target sector and geographical focus, TDCX’s primary competitors are:

 

 

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Source: Frost and Sullivan

Note: VoxPro is a subsidiary of Telus International.

Omnichannel CX service providers—key advantages

While smaller in scale relative to the larger service providers, omnichannel CX service providers, including our Company, 24-7 Intouch, TaskUs and Voxpro, share similar key advantages over the larger competitors, including:

 

   

Stronger presence with faster growing technology and start-up service ecosystems, including companies from ride sharing, social media, online food delivery, e-commerce, autonomous driving, online gaming and fintech domains.

 

   

Ability to quickly adapt to newer technologies and changing demands upon CX service providers as consumer behaviors change over time

 

   

Specialized, proprietary focused verticals and core capabilities, which can typically attract higher margins from clients given the specialized nature of work output

 

   

Greater focus on employee retention and engagement, including a greater ability to promote inclusive and attractive working cultures for the benefit of attracting and retaining talent

 

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TDCX’s primary competitive landscape benchmarking

Revenue scale

TDCX’s revenue for 2020 was US$323 million, as compared to its peers’ median of US$2,304 million for 2020.

Outsourced BSS 2020 Group Revenues

 

 

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Source: Frost & Sullivan.

Note:

Total company revenues for competitors may include non-BSS and / or non-CX related revenues, and excludes peers without public disclosure. Respective FX rates USDEUR and USDGBP of 0.8175 and 0.7324, respectively, are used for TDCX’s peers. USDSGD FX rate of 1.3478 is used for TDCX.

(1)

Telus International’s 2020 numbers reflect the acquisition of Competence Call Center (acquired in Jan 2020) and Managed IT Services from Telus Corp. (acquired in Apr 2020).

EBITDA margins

TDCX’s 2020 EBITDA margins of 33% is superior to those of its peers, which have a median of 16%.

Outsourced BSS 2020 EBITDA Margins

 

 

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Source: Public filings, Bloomberg.

Note:

Total company revenues and EBITDA for competitors may include non-BSS and / or non-CX related revenues, and excludes peers without public disclosure.

(1)

Telus International’s 2020 numbers reflect the acquisition of Competence Call Center (acquired in Jan 2020) and Managed IT Services from Telus Corp. (acquired in Apr 2020).

 

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EBITDA per employee vs. Revenue Growth

Compared to its peers, TDCX has the highest revenue growth for the period 2018-2020. TDCX also has a relatively high EBITDA per employee due to the unique focus on clients from the new economy industries.

 

LOGO

Source: Frost and Sullivan

Note: EBITDA margin is a non-IFRS measure that should not be considered in isolation or as a substitute for financial results reported under IFRS. Similarly titled non-IFRS measures may be calculated differently by or for different companies.

(1)

Average number of employees at the beginning and end of respective FY2020 periods as disclosed in company filings.

Competitive moats in the CX services market

Ability to harness and successfully implement technology into operations

In the past, the BSS and CX industry was primarily looked at as a means for cost reduction, taking advantage of labor arbitrage. Increasingly, enterprises consider outsourcing as a competitive strategy to increase efficiency, accelerate innovation, and expedite product development lifecycles. Service providers have to make substantial investments in customer management and communication platforms as well as data analytics and AI solutions. Service providers who manage to develop the expertise and technical skills to implement these solutions successfully are able to create a moderate barrier to entry against new entrants.

Bargaining Power of Enterprise Clients

A significant number of outsourced BSS and CX clients are global enterprises / MNCs with greater financial ability to exert more buying and negotiating power against BSS and CX providers. Additionally, these clients often have the capability to move some of their outsourced processes back in-house. On the other hand, the outsourced BSS and CX markets are highly fragmented and it is relatively easy for clients to switch between BSS and CX providers. This has resulted in clients being able to negotiate for better contract pricing and value-added services, putting pressure on BSS and CX providers to sustain their revenues and margins in the long-run. The relatively competitive landscape is likely to defer new entrants.

 

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Capital

The BSS and CX industries are capital-intensive, as service providers need to make heavy investment in setting up the infrastructure and the necessary people adding pressure on profit margins and free cash flows. Over time, the BSS and CX industries have evolved into a revenue generating industry, however the budget and cost of doing business remains the primary concern for many outsourcing companies considering to enter the outsource BSS and CX market.

Opportunities in the CX services market

Higher Value Services

CX center service providers need to specialize in new technologies and their implementation to enable them to deliver on business outcomes. Enterprises are seeking to partner with service providers who offer innovative services thorough industry knowledge and experience. These higher value services translate directly into higher revenue opportunities.

Digital Services Platform

Customers are looking for personalized services along their experience journey when engaging with a brand. Heightened customer expectations are driven by real-time insights and digital experiences that customers can enjoy everywhere. Digital services platforms enable enterprises to make timely business decisions and create omnichannel experiences by providing access to real-time customers’ insights.

New Economy Market

As the traditional economy markets matures in terms of outsourcing services spending, service providers are now expanding their presence into the new economy high growth industries such as social media, search engine companies, and so on. These organizations are lean and outsource their business process operations, allowing for service providers to build long-term relationships and grow their wallet share.

Threats to the CX services market

Intense competition

The growth of the BSS market has led to the expansion of the industry. The high level of competition in this market segment is now a challenge for service providers requiring them to differentiate in the market.

Service providers are now investing in next-generation technologies such as analytics or chat bots or investing in training and retailing talent or specializing in certain horizontal or vertical BSS capabilities to grow in the market.

Global in-house operation centers

In the past global companies set up delivery centers to be able to control and manage their operations in-house. In the digital era, the scope of these in-house operation centers has matured from a delivery center for business processes to a strategic hub for R&D/engineering services. As the complexities of business licensing and the finding and hiring of necessary talent teams decrease in India, the Philippines, Eastern Europe, and Latin America, in-house operation centers will continue with their existing operational processes. This acts as a deterrent to the outsourcing services market.

 

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Challenges to the CX services market

Agent/Resource Recruitment and Retention

Hiring and retaining the right agents is always a challenge for CX center managers because it has a direct impact on customer relationships and experience. CX center agent retention has been a prolonged problem in the industry and therefore, management needs to promote a culture of tenure.

Delivering seamless multi-channel experiences

Creating an exceptional CX is about creating successful end-to-end journeys. Consumers use or shift between multiple channels and an effective CX management requires building consistency and integration between them.

Facebook, Twitter, Instagram, and other social media channels have now evolved into major customer service channels. There has been a tremendous challenge in integrating social media channels with more traditional customer service processes. This requires integration via infrastructure that supports omnichannel engagement.

Reevaluation of global delivery models

Due to the COVID-19 pandemic, the Philippines and India were significantly affected by lockdowns and movement control measures enforced by the respective governments. As a result, some companies have started pushing for onshore or rightshoring CX center delivery models.

 

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BUSINESS

Our Mission

Our mission is to assist our partners and our people achieve higher success through innovative and high-performance solutions.

Overview

We are a high-growth digital customer experience solutions provider for innovative technology and other blue-chip companies. We offer omnichannel CX solutions, sales and digital marketing services and content monitoring and moderation services. We have specific expertise in providing tailored digital customer experience solutions to manage complex customer interactions that go beyond providing boilerplate responses and which require a highly trained workforce capable of effectively delivering our differentiated services and solutions to our clients and their customers. Our focus on complex digital solutions enables us to provide higher value services and solutions for our clients. Our strategy has resulted in a highly attractive financial profile. We have experienced robust growth. From the year ended December 31, 2018 to the year ended December 31, 2020, our revenue, profit for the year and EBITDA have grown at a CAGR of 54.9%, 50.3% and 60.7%, respectively. In the years ended December 31, 2018, 2019 and 2020, we recorded revenue of S$181.2 million, S$330.3 million and S$434.7 million (US$323.3 million), profit for the year of S$38.1 million, S$73.5 million and S$86.1 million (US$64.0 million) and EBITDA of S$55.4 million, S$108.1 million and S$142.9 million (US$106.0 million), respectively. For the same periods, we recorded net profit margins of 21.0%, 22.2% and 19.8%, respectively, and EBITDA margins of 30.6%, 32.7% and 32.9%, respectively. In the six months ended June 30, 2020 and 2021, we recorded revenue of S$209.3 million and S$251.6 million (US$187.2 million), profit for the period of S$38.5 million and S$44.8 million (US$33.3 million) and EBITDA of S$65.2 million and S$78.2 million (US$58.2 million), respectively. For the same six month periods, we recorded net profit margins of 18.4% and 17.8%, respectively, and EBITDA margins of 31.1% and 31.1%, respectively.

We believe our employees and our distinctive corporate culture are key enablers of our success, a core strength and part of our competitive advantage. Our corporate culture is designed to foster a work environment that attracts, develops and retains a highly skilled workforce that can effectively engage in complex customer interactions. We focus on reinforcing a culture that emphasizes a sustainable and collaborative approach while being fully committed to our clients’ requirements. We strive to ensure that our distinctive culture is incorporated within all the relationships and processes of our organization and fits within our values and goals.

We have an international footprint. As of the date of this prospectus, we service our clients’ customers globally in more than 20 languages. This international footprint is supported by 13,308 employees as of June 30, 2021, who are located in offices in ten geographies: Singapore, the Philippines, Malaysia, Thailand, China, Japan, Spain, India, Colombia and Romania.

Our business comprises three key service offerings: (1) omnichannel CX solutions; (2) sales and digital marketing services; and (3) content monitoring and moderation services. We also offer services consisting of miscellaneous activities, such as providing workspaces to existing clients and providing human resource and administration services to clients. We help our clients manage relationships with their customers by providing digital customer experience solutions, such as after-sales service and customer support across ten industry verticals, including travel and hospitality, digital advertising and media and fast-moving consumer goods. Our sales and digital marketing services offering helps our clients market their products and services to potential customers in both the business-to-consumer, or B2C, and the business-to-business, or B2B, markets. Our content monitoring and moderation services offering helps our clients create a safe and secure online environment for social media platforms by providing a human touch to content monitoring and moderation services.

 

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Our competitive strengths

Digital customer experience solutions provider for high-growth technology disruptors

We provide a high value-added service platform to market-leading clients in the new economy sectors and traditional blue-chip clients who are undergoing digital transformation across their organizations. Frost & Sullivan defines the “new economy” as the high growth industries that are on the cutting edge of digital technology and are the driving forces of economic growth. These industries are seen as an evolution of the existing traditional economy aided by technological advancements and innovation. Our services provide synergies with our clients’ digital economy value chains and enable our clients to grow and transform their businesses’ consumer experience. We offer customized and differentiated customer contact solutions and possess the ability to handle complex and mission-critical digital customer experience interactions. These offerings are enhanced by our ability to solve problems for our clients by leveraging customer interaction data analytics to allow our clients to access real-time data which gives them valuable insights on their end-customers, allows them to improve business processes and make more prompt business decisions to resolve problems in a more timely manner.

We have leveraged our integrated omnichannel and multimodal solutions to shape user experiences in a world of evolving and proliferating digital communication and technology platforms from traditional channels, such as voice and email, to advanced technology driven channels, ranging from messaging and social media to AI-powered chat bots and in-app interactions. We are also able to synergize our in-house developed technology with third-party technology and platforms to solve operational issues which our clients are facing.

We have an international footprint with offices in ten geographies across Asia, Europe and Latin America, which provides us with access to a broad talent pool and equips us with multilingual capabilities to serve a global customer base, including English and key Asian languages, such as Mandarin, Thai, Korean, Malay (Malaysia and Indonesia), Vietnamese and Japanese.

Strong focus on human capital development to deliver superior customer experiences

We believe the quality of our employees is a key differentiator in winning and retaining business, as well as in delivering a superior customer experience. Through our structured recruitment process and strong emphasis on career development, we strive to attract, develop and retain the industry’s high caliber talent who possess deep knowledge of local customs and cultural sensitivities. As of June 30, 2021, we had 13,308 employees of which more than 60% are college or university graduates, including employees with master’s degrees and/or doctorates, which helps us handle complex campaigns. Our employees have access to ongoing internally and externally developed supplementary training and certifications in a number of areas, such as COPC, a standard certification, which is a widely recognized standard across the customer experience industry.

In the years ended December 31, 2018, 2019 and 2020, our annual voluntary attrition rate, measured by the number of employees that voluntarily left us in a period divided by the average number of employees in such period, was 21.5%, 23.1% and 24.8%, respectively, compared to the industry average of 30% to 34% in the Asia Pacific region, according to Frost & Sullivan. Consistent with our relatively low attrition rates, employee satisfaction surveys have demonstrated a high degree of satisfaction. Our company-wide employee satisfaction scores were at 87%, 91%, 87% and 89% in our annual internal employee engagement surveys in 2018, 2019 and 2020, including most recently in July 2021. We believe that our strong focus on human capital has been critical to our ability to minimize business disruptions and rehiring and training costs, resulting in high service quality for our clients. Our commitment to the development of our people is reflected in the multiple awards we have received, including the Best Companies to Work for In Asia 2020 (both our Thailand and Philippines office), the Top 100 Asia’s Best Employer Brands 2019 from Employer Branding Awards (our Malaysia office) from the HR Asia Awards, the Great Place to Learn Certification from the Great Place to Work Institute & SkillsFuture Singapore in 2019 and 2020 (our Singapore office), and Asia’s Best Employer Brand Award from the World HRD Congress in 2018 (our Singapore office).

 

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Well-positioned to capitalize on positive “digital economy” trends and increasing demand for our services

We believe favorable underlying industry trends continue to fuel the growth of our clients. According to Frost & Sullivan, there are a plethora of internet-based technology offshoots driving the new economy growth, including companies in the e-commerce, digital advertising, fintech, online gaming and sharing economy industries. Driven by fundamental shifts in consumer behavior and increased adoption of internet and mobile usage, the global market sizes of retail e-commerce sales, digital advertising spend, sharing economy and online gaming (by transaction value) are estimated to grow at CAGRs of 14.5%, 15.3%, 18.2% and 9.3% from 2021 through 2025, respectively, as reported by Frost & Sullivan.

We believe our clients view their relationship with us as strategically important. New economy clients increasingly seek customized solutions in an evolving digital business services market that is increasingly becoming more complex. We believe the trend will continue as new economy clients rely on us to perform omnichannel CX solutions so that they can maintain their employee-lite, nimble business models, while we provide a service framework that can scale along with their growth. Furthermore, given their relative lack of physical touchpoints with their end-users, new economy clients tend to place a greater emphasis on the quality of customer experience service providers, where we believe we are strongly positioned. Our digital hiring platform, Flash Hire, enables us to remain agile and keep up with the growth of our high-growth clients by allowing us to rapidly identify, evaluate and hire candidates as needed.

Attractive client base of some of the largest and most disruptive companies in fast-growing industries and markets along with traditional blue-chip companies which are undergoing digital transformations

Our client base consists of some of the leading names in their respective industries, such as Facebook and Airbnb, other fast-growing, new economy companies for which we can scale up projects as they grow, as well as traditional blue-chip companies that rely on us to partner in their digital transformation journey. In the past few years, we have proactively increased our new economy client base, which provides strong growth opportunities for us. As of June 30, 2021, 92.7% of our agents, which are the customer facing employees that work on our campaigns, were staffed on campaigns for new economy clients.

We seek to forge partnerships and create long-term relationships with our clients, where they view us as an integral part of their organization through the solutions we offer. By growing and partnering with them over the long term, we have expanded the scope of our services and solutions and have become seamlessly integrated into our clients’ operations, while helping them deliver on their brand promise. On a combined basis, Facebook and Airbnb accounted for a total of 52.0%, 65.9%, 60.4%, 62.3% and 62.3% of our revenue for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, respectively. From January 1, 2018 to June 30, 2021, we have acquired 32 new clients. Our new clients are high-growth, new economy disruptors and traditional blue-chip companies engaged in businesses across multiple jurisdictions. For example, since 2018, we have grown relationships with a global payments platform provider, a leading social network, a leading consumer electronics company, a leading regional e-commerce platform and a leading video game developer.

Track record of high-growth financial performance

We focus on providing our clients with a differentiated level of service, which we believe enables us to grow our business together with the growth of our clients’ businesses as well as grow our share of our client’s budget. Due to a combination of an increase in the amount of work for existing clients as well as attracting work from new clients, we increased the average number of our agents by 118% from 3,701 for 2018 to 8,070 for 2020. During this period, we have experienced robust growth. From the year ended December 31, 2018 to the year ended December 31, 2020, our revenue, profit for the year and EBITDA have grown at a CAGR of 54.9%, 50.3% and 60.7%, respectively.

 

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Our ability to provide a differentiated level of service and higher valued and more sophisticated services, while efficiently increasing the scale of our business has resulted in our net profit margin of 21.0%, 22.2%, 19.8%, 18.4% and 17.8% for the years ended December 31, 2018, 2019 and 2020, and the six months ended June 30, 2020 and 2021, respectively. It also resulted in our EBITDA margin of 30.6%, 32.7%, 32.9%, 31.1% and 31.1% for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, respectively. Our EBITDA margin for 2020 is the highest among CX-centric outsourced service providers, according to Frost & Sullivan.

We have also managed our growth while maintaining a low debt profile. As of December 31, 2018, 2019 and 2020, we had a total debt to EBITDA ratio of 0.6, 0.3 and 0.3, respectively. We also intend to use a portion of the proceeds from our offering to repay the Credit Suisse Facility, which represents a significant portion of our debt that is outstanding as of the date of this prospectus. Our strong balance sheet, combined with our ability to grow our business and generate cash flows, gives us a strong foundation for focused investments and further business expansion.

Dynamic and highly experienced management team

We have an experienced, hands-on and savvy management team who combine global expertise with local insights. Our Founder, Executive Chairman and Chief Executive Officer, Mr. Laurent Junique, has over 25 years of industry experience and has won numerous awards, including the “Ernst & Young Entrepreneur of the Year in the Outsourced Solutions category” for Singapore in 2018. Our management team has an average of over 15 years of relevant industry experience and most of our senior management have worked with us for over five years, which has allowed us to accumulate valuable operational experience and deep vertical expertise, while building and maintaining close relationships with our key clients. Our management team has been a champion in promoting a vibrant and distinctive culture that emphasizes teamwork, a high degree of flexibility, dedication to the client and alignment with client goals. Under the leadership of our management, we have been able to grow our Company from 1,400 employees as of December 31, 2012, the year we commenced servicing new economy clients, to 13,308 employees as of June 30, 2021.

Our growth strategy

Leverage network effects to expand client coverage and service offerings globally

Our growth strategy is to create a significant network in each of our markets so that we can gain local insights, on-the-ground capabilities and operational experience to expand our client coverage and digital offerings. We intend to achieve this through (i) deepening our relationships with our existing clients, (ii) growing our client base and (iii) extending and “future-proofing” our omnichannel capabilities. We expect the learning and insights from each client will enable us to deepen our expertise in key verticals and further expand our capabilities across service offerings, industries and regions, thereby creating network effects. As we scale and grow our expertise, we expect to penetrate more markets as the impact from our network effects increase.

Deepening our relationships with our existing clients

Our relationships with our new economy clients offer significant opportunities for growth. As we demonstrate the value that we provide, we are frequently able to expand the scale and scope of our services in a variety of ways and grow our wallet share. With our new economy clients’ strong business model scalability, we are well-positioned to ride their growth. We also find opportunities to cross-sell different types of digital offerings and use data analytics to provide integrated insight-driven strategies to help clients improve their business outcomes. In the past, clients who have engaged us for our services have been willing to turn over additional and more critical processes to us as we demonstrate our capabilities over time. As we become more intricately knowledgeable of our clients’ businesses and processes, we find opportunities to expand across the value chain and provide new and increasingly complex digital offerings to them via multiple channels to improve their processes. This in turn encourages client “stickiness” and is a factor that discourages our clients from turning to other providers.

 

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Growing our client base

We seek to develop long-term client relationships with new clients, especially with clients who (i) require similarly complex services as our existing clients, (ii) provide opportunities for us to deliver a wider range of capabilities and meaningful impact to their businesses, and (iii) facilitate robust pipeline development and a strong win-rate of new top-tier clients. We use a multifaceted, technology driven strategy to attract new economy clients.

Extending and “future-proofing” our omnichannel capabilities

We seek to improve our capabilities through continued investments in digital technology and use of third-party technology. We strive to grow our capabilities in future technologies and channels and to continuously evolve with new technology offerings, such as Internet of Things, or IoT, products, wearables and apps, among other areas.

Enhance our human capital and reinforce our distinct corporate culture

Our people are critical to our success. Our ability to grow will depend on our ability to continue to attract, train, and retain large numbers of talented individuals. We continue to focus on maintaining a work environment that would make TDCX an “employer of choice.” We intend to achieve this through various initiatives, including:

 

   

working with new economy digital disruptor clients that are the companies of the future;

 

   

utilizing innovative recruiting techniques that will appeal to potential employees including young talent;

 

   

providing training and development throughout the tenure of an employee’s career, such that our employees remain educated and agile to meet our clients’ evolving requirements;

 

   

providing compensation with appropriate incentives that rewards employee commitment, resulting in high standards of customer experience and support for our clients;

 

   

supporting our employees in work from home situations with the technology ecosystem that enables them to remain productive and connected to training opportunities;

 

   

fostering a healthy work environment where employees work hard but have fun; and

 

   

having office locations in areas that are accessible and appealing, with office interior designs that are contemporary, collaborative and inspiring.

We believe that maintaining a vibrant and distinctive culture is critical to growing our business.

Prudent expansion into new geographic markets

We have a wide footprint of delivery centers in a number of locations across Asia, Europe and Latin America to serve domestic, regional and global markets and we plan to expand our coverage. As of the date of this prospectus, we had offices in a total of ten geographies, including newly opened offices in Beijing in 2017; Barcelona in 2018; Cebu and Yokohama in 2019; Bogota, Hyderabad and Shanghai in 2020 and Bucharest in 2021. The expansion into new locations was driven by our strategy of growing to meet the needs of our existing clients, such as our clients expanding into new markets or seeking to replace their existing service providers. Since adding offices in these locations, we have also added new clients based in these countries, as well as internationally who have been attracted by our increased geographical capacities. We intend to continue to expand our footprint prudently, but rapidly, to ensure we can meet the evolving needs of our clients, including processes requiring multi-jurisdictional and multi-lingual capabilities, and better position ourselves to win new engagements from our existing clients and attract new clients.

 

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In addition to expansion in recently entered markets, we have identified Korea and other Chinese regional markets where we do not currently operate as potential new markets for entry. In 2020, we established a new office in Hyderabad, India as an entry point to the Indian market and to serve as our hub for digital innovation and the global English market, established an office in Bogota, Colombia as an initial office marking our entrance into the Latin America market, and grew our China presence by establishing an office in Shanghai. We established an office in Romania in 2021 to address other opportunities, and we expect it to begin operations in the second half of 2021. We also intend to open an office in the Republic of Korea by 2022.

Key location criteria for setting up new offices include (i) the ability to tap a wide talent pool that has the desired skills to better cater to client requirements, (ii) minimal time zone difference with, and proximity to, existing and potential clients, and (iii) cost competitiveness.

Maintain operational efficiencies through streamlined operations

We strive to be a productive and efficient operator. For example, we utilize digital recruiting techniques, such as our Flash Hire platform, to minimize recruiting costs and improve candidate selection accuracy. We are also adept at educating and developing our employees, through our Flash Learn platform of online courses and learning opportunities, which is a fast and flexible way to train our workforce across multiple geographies. Our innovative digital operating platform, Flash, which we had implemented prior to the COVID-19 pandemic, has enabled us to continue to implement our growth strategy in new markets despite social distancing restrictions on in-person meetings and training sessions. We have business excellence teams that review our standard operating procedures, design customer interaction playbooks and gather and implement best practices across the organization. Larger campaigns also have campaign-specific materials developed to meet specific client needs. In addition, insights gained through our data analytics capabilities also help us optimize staffing levels, track key performance indicators and employee engagement, and enhance workforce management to realize operational efficiencies. As we grow in scale, we intend to further centralize our procurement processes for our infrastructure, technology, telecommunication equipment and professional services in order to lower costs and streamline supplier relationships.

Prudent strategic acquisitions and opportunistic partnerships

We plan to continue to expand our capabilities globally as well as across industry verticals and service offerings. While we expect this will primarily occur through organic growth, from time to time, we expect to selectively evaluate strategic partnerships, alliances and acquisitions to develop or acquire:

 

   

new clients within our existing client verticals, with minimal overlap with existing clients;

 

   

new client verticals with high growth potential, such as industries where demand exceeds our ability to scale our business organically and other industries such as in financial technology, digital marketing and gaming;

 

   

new language capabilities to enter into new, large and diverse markets such as Europe and Latin America; and

 

   

new operational capabilities which can improve our efficiencies and complement our existing offerings, including the ability to introduce new offerings.

We believe that our strong balance sheet combined with our ability to grow our business and generate cash flows gives us a strong foundation for focused investments and further business expansion.

 

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Key Financial and Operational Metrics

The following table sets forth our key financial and operating metrics as of and for the periods indicated.

 

     Six Months Ended
June 30,
     Year Ended December 31,  
   2021      2020      2020      2019      2018  

Revenue (S$ thousands)

     251,637        209,280        434,723        330,265        181,233  

Profit for the period/year (S$ thousands)

     44,763        38,524        86,094        73,536        38,088  

EBITDA (S$ thousands)(1)

     78,209        65,177        142,926        108,087        55,376  

Net profit margin (%)

     17.8        18.4        19.8        22.2        21.0  

EBITDA margin (%)(1)

     31.1        31.1        32.9        32.7        30.6  

Number of clients(2)

     43        41        38        38        36  

Number of agents(2)

     10,020        7,473        9,128        7,213        4,608  

Revenue per agent (S$ thousands)(3)

     28        27        54        54        49  

Debt (bank loans) (S$ thousands)

     289,054        40,113        40,306        34,421        30,548  

Debt/EBITDA Ratio(1)

     N/A        N/A        0.3        0.3        0.6  

 

Notes:

(1)

EBITDA, EBITDA margin and Debt/EBITDA Ratio are non-IFRS financial measures. We define EBITDA as profit for the year before/period interest expense, interest income, income tax expense and depreciation expense, EBITDA margin as EBITDA as a percentage of revenue, Debt as bank loans and Debt/EBITDA Ratio as bank loans divided by EBITDA. EBITDA, EBITDA margin and Debt/EBITDA Ratio are not measures calculated in accordance with IFRS. As a result of our early adoption of IFRS 16 Leases as of January 1, 2017 using the full retrospective approach, EBITDA and EBITDA margin disclosed may not be comparable to similarly titled measures reported by other companies as our calculation includes depreciation on the right-of-use assets and finance costs on lease liabilities. While we believe that EBITDA, EBITDA margin and Debt/EBITDA Ratio provide useful information to investors in understanding and evaluating our results of operations in the same manner as our management, our use of EBITDA, EBITDA margin and Debt/EBITDA Ratio has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under IFRS.

The following table presents a reconciliation of EBITDA to profit for the period and EBITDA margin to net profit margin, the most directly comparable financial measure calculated and presented in accordance with IFRS, for the periods indicated:

 

                                                                                   
    For the Year Ended December 31,  
    2020     2019     2018  
    US$     S$     Margin     S$     Margin     S$     Margin  
    (in thousands, except percentages)  

Revenue

    323,358       434,723             330,265             181,233        

Profit for the year and net profit margin

    64,039       86,094       19.8     73,536       22.2     38,088       21.0

Adjustments:

             

Depreciation expense

    24,595       33,065       7.6     24,599       7.4     12,908       7.1

Income tax expenses

    15,846       21,303       4.9     7,524       2.3     3,520       2.0

Interest expense

    2,275       3,058       0.7     2,893       0.9     1,128       0.6

Interest income

    (442     (594     (0.1 %)      (465     (0.1 %)      (268     (0.1 %) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA and EBITDA margin

    106,313       142,926       32.9     108,087       32.7     55,376       30.6
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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     For the Six Months Ended June 30,  
     2021     2020  
     US$     S$     Margin     S$     Margin  
     (in thousands, except percentages)  

Revenue

     187,174       251,637             209,280        

Profit for the period and net profit margin

     33,296       44,763       17.8     38,524       18.4

Adjustments:

          

Depreciation expense

     14,757       19,839       7.9     15,633       7.5

Income tax expenses

     7,464       10,034       4.0     9,769       4.7

Interest expense

     2,787       3,747       1.5     1,496       0.7

Interest income

     (129     (174     (0.1 %)      (245     (0.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA and EBITDA margin

     58,175       78,209       31.1     65,177       31.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(2)

The number of clients and number of agents are calculated as of December 31 of the years indicated or as of June 30 of the period indicated.

(3)

Revenue per agent is calculated as revenue for a period divided by the average of the number of agents at the end of each month during such period. We monitor our revenue per agent because we believe it measures our success in expanding our client relationships higher up the value chain. Our client contracts are mostly based on a fixed rate per FTE dedicated and assigned to the applicable campaign. Under our employee classification system, an FTE is classified as an "agent."

For further information on our key financial and operating metrics, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Key Financial and Operational Metrics.”

Our Services and Solutions

Our business comprises three key service offerings: (1) omnichannel CX solutions; (2) sales and digital marketing services; and (3) content monitoring and moderation services. We also provide other services for clients, such as providing workspace at our offices in connection with existing campaigns and providing human resource and administration services to clients.

The following table sets forth our service provided, by amount and as a percentage of our revenues for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021.

 

     For the Year Ended December 31,  
     2020      2019      2018  
     US$      S$      % of
Revenue
     S$      % of
Revenue
     S$      % of
Revenue
 
     (in thousands, except percentages)  

Revenue by Service

                    

Omnichannel CX solutions

     210,820        283,427        65.2        217,349        65.8        120,238        66.4  

Sales and digital marketing

     49,267        66,235        15.3        46,839        14.2        43,124        23.8  

Content monitoring and moderation

     59,633        80,170        18.4        61,526        18.6        14,361        7.9  

Other service fees(1)

     3,638        4,891        1.1        4,551        1.4        3,510        1.9  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenue

     323,358        434,723        100.0        330,265        100.0        181,233        100.0  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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     For the Six Months Ended June 30,  
     2021      2020  
     US$      S$      % of
Revenue
     S$      % of
Revenue
 
     (in thousands, except percentages)  

Revenue by Service

              

Omnichannel CX solutions

     117,292        157,688        62.7        138,396        66.1  

Sales and digital marketing

     35,492        47,715        19.0        29,335        14.0  

Content monitoring and moderation

     32,019        43,046        17.1        39,441        18.8  

Other service fees(1)

     2,371        3,188        1.2        2,108        1.1  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenue

     187,174        251,637        100.0        209,280        100.0  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Note:

(1)

Revenues from other service fees include revenues classified in our Consolidated Financial Statements as workspace, payroll outsourcing and other services.

Since 2012, when we secured our first new economy client, new economy clients have grown to contribute up to 66.8%, 82.5%, 87.8%, 86.8% and 92.2% of our total revenues for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, respectively. Our top five clients for each of 2018, 2019 and 2020, on a consolidated basis, accounted for a total of 83.4%, 88.9% and 83.8% of our total revenues in the years ended December 31, 2018, 2019 and 2020, respectively. Our top five clients for each of the six months ended June 30, 2020 and 2021, on a consolidated basis, accounted for a total of 87.0% and 84.6% of our total revenues in the six months ended June 30, 2020 and 2021, respectively.

We have an international footprint. As of the date of this prospectus, we service our clients’ customers globally in more than 20 languages. This international footprint is supported by 13,308 employees as of June 30, 2021, who are located in offices in ten geographies: Singapore, the Philippines, Malaysia, Thailand, China, Japan, Spain, India, Colombia and Romania (see “—Employees and Culture—Employees by Position and Geographic Location of Office Providing Services”). For more information on our revenues by geographic segment, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Certain Income Statements Line Items—Revenues—Geographic Segment.”

Omnichannel CX solutions

We help our clients manage their relationships by providing digital customer experience solutions, such as after-sales service and customer support across ten industry verticals, namely: (1) travel and hospitality, (2) digital advertising and media, (3) fast-moving consumer goods, (4) technology, (5) financial services, (6) fintech, (7) government and non-governmental organizations, (8) gaming, (9) e-commerce and (10) education. We offer omnichannel CX solutions to customers located in twelve offices in ten geographies across Asia, Europe and Latin America. We provide information about our clients and their products and services to their customers and cover the entire customer life cycle. Customer contact occurs through phone call, online chat, SMS, email and a variety of other channels. Our customized services further integrate us into the strategic objectives of our clients, often leading to closer, more resilient client relationships. In addition to our highly tailored services for complex interactions, we are also able to provide omnichannel CX solutions such as end-user support and troubleshooting for software and consumer electronic devices and sales and digital marketing campaigns. Our key clients for these services include Airbnb, a leading international airline, a global payments platform provider and a multinational food and beverage company.

Sales and Digital Marketing Services

Our sales and digital marketing services help our clients market their products and services to their potential customers in both the B2C and the B2B markets. In the B2B market, we primarily help our digital advertising

 

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platform clients attract more advertisers and grow their Internet and social media advertising businesses. For example, we have been engaged by these advertising platforms to help small-and medium-sized businesses develop online advertising campaigns on our client’s platforms. We do this by helping these enterprises optimize their advertising campaign key words and target demographics to make their advertisements more effective. This increased effectiveness translates to more business for our clients as their customers experience greater return on their advertising investments and become more likely to continue or expand advertising purchases. In the B2C market, we have sales and direct-marketing capabilities to support customer campaigns. Our sales and digital marketing services are supported by a suite of data analytical capabilities that provide business insights through user-friendly data visualizations. Our key clients for these services include Facebook and a leading search engine company.

Content Monitoring and Moderation Services

We commenced our first campaign for content monitoring and moderation services in 2018 and since then have rapidly expanded this service offering. Our content monitoring and moderation services create a safe and secure online environment for social media platforms by providing human interaction to content moderation services. Effective content moderation requires excellent command and understanding of the specific language involved, as well as a good understanding of the regional and local political and social context of social media exchanges, which are fluid and constantly evolving. This makes it difficult for our clients to rely solely on technical solutions, which is why our skilled agents are paramount. Our clients expect our campaigns to be staffed with highly skilled and trained personnel who have specific experience in the geographies and market knowledge of the countries we monitor. Our teams review social media platforms for content that violates terms of service or is illegal pursuant to the specifications and guidelines provided by the client. Our content moderation teams are immersed in a positive work culture and have a supportive environment focused on their health, wellbeing and resiliency, including having access to dedicated mental wellness professionals who are located onsite in our offices. This helps ensure a higher level of employee engagement and lower levels of attrition as we remain focused on ensuring the wellbeing of our employees. It also creates excellent outcomes for our clients. In 2019, 2020 and the first half of 2021, our audits show that our agents correctly handled flagged content in over 90% of cases and correctly identified the reason for taking such action in over 90% of cases.

In late 2021, we also commenced providing data labelling services to our clients. We categorize and label content on our client’s platforms to train and improve machine learning while also refining algorithms and predictive models. Our client then uses this information to enhance the user experience for the end users of the platform and utilize key insights on user behavior and evaluation of models for further product improvements and development.

Other services

We provide additional services that we typically offer to select existing clients in support of existing engagements that these clients have with us. These services include providing workspace at our offices in connection with existing campaigns.

Operations

We are capable of providing our services on a 24/7 basis from our twelve offices. As of June 30, 2021, we also have more than 1,000 agents on assignment to clients. We provide services in more than 20 languages, including English and key Asian languages, such as Mandarin, Thai, Korean, Malay (Malaysia and Indonesia), Vietnamese and Japanese and have capabilities in Asian “unicorn” languages such as Bhutanese, Dhivehi and Sinhalese. Some of our campaigns are served out of multiple offices. Our engagements are organized by campaign, with each campaign being serviced by a dedicated team. All of our newly employed agents go through an initial training process, as well as campaign-specific training. The total training period can last up to three months in some cases. We have made significant investments in infrastructure, proprietary technologies, management and

 

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development processes that capitalize on our extensive experience managing large and regional operations. As of June 30, 2021, we were engaged by 43 clients and on 114 active campaigns. Multiple teams can serve each client, as a single client may have multiple campaigns that are each organized around discrete work requirements and specifically organized and staffed with campaign-specific training to address the particular needs and specifications of the campaign. If and when a campaign is complete, our employees are assigned to a different campaign, including to different campaigns with the same client to utilize client-specific know-how.

The following table sets out our staffing structure for a typical client campaign:

 

LOGO

As of June 30, 2021, we had campaign teams staffed by up to several hundred employees. Campaign teams are supported by campaign specific technologies, which are often provided by our clients (such as proprietary client-developed customer relationship management, or CRM, software or telephony systems), licensed or developed by us or our clients (see “—Information Technology and Management Information Systems”).

Our operating structure gives us the flexibility to quickly adapt to client requirements and changing circumstances. In the past, we have been successful at quickly ramping up new campaigns or expanding existing campaign teams on short timelines. For an example of our scaling capability, see “—Our Services and Solutions—Case Study—New Economy Client.”

Data Analytics

As part of our value-added services for our customer service operations, we have a dedicated team of data analytics specialists who help monitor both our employee performance and our clients’ customer satisfaction metrics, such as customer satisfaction, net promoter score, average holding time, and first call resolution. As of June 30, 2021, we have a team of over 150 analytics personnel that support our global operations platform. We are focused on the use of data analytics to optimize our platform in order to meet our clients’ needs by allowing us to provide continuous access to key performance indicators of our clients and also to empower our resource allocation and identify areas that we can improve upon. Our regional business analytics team is a key part of our success as it supports the decision-making processes of our management team, human resources and finance functions, business development efforts and our business excellence optimization strategies. Finally, for certain of our campaigns, we include dedicated data analysts to support the campaign teams.

In order to ensure that the benefits of our data analytics platform are integrated into our services at the operator level, we encourage our employees to take various data analytics courses we have available. These courses include introduction to data analytics and key concepts as well as advanced classes for data analysis, including topics such as thinking processes, reporting and charting, and data analytics presentation to clients. The goal of these courses is to empower our employees by giving them a basic understanding of how data analytics is

 

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incorporated into our client solutions. We believe that these courses offered to our employees generally will help us offer solutions that integrate a robust data analytics offering for our clients with a workforce that understands and is empowered to incorporate data analytics into their daily work.

Finally, our data analytics is supported by our data warehousing infrastructure. Our Enterprise Data Warehouse, or TED, is a cloud-based data warehouse which we implemented instead of a traditional tiered, on-premises approach. TED allows us to scale our data warehousing capability to match the pace and scale of growth of our digital client base. TED serves as the ultimate repository for our business data. TED is hosted by a leading cloud storage provider and enables us to provide actionable insights to our clients who need us to guide them on the changes happening at the frontline of their businesses with their clients.

Communication Channels

Our services are delivered through our reliable and scalable technology-enabled, omnichannel platform. Our omnichannel approach integrates direct customer contact through digital channels, allowing us to engage with the customer through multiple channels of interaction. We cover traditional channels such as voice-only telephone communications, fax and email communications. As our clients’ customers increasingly transition towards digital communication and integrated internet-of-things networks, we have evolved and invested in our capabilities to adapt to emerging technologies, such as through online text chat, video-chat, SMS messages and social media. We are selectively rolling out our chat-bot capabilities, based on technologies licensed from third parties, to allow natural language processing and artificial intelligence supported interactions. We are constantly evaluating new communication technologies, such as internet-of-things related capabilities, with the aim of integrating these channels into our platform. See “—Innovation and Development.” We view our history through the types of customer interactions we have had and believe that we are now in a digital transformation phase, which began in 2012.

Each of our channels is available simultaneously and integrated with our other services, so customers using different forms of communication can be treated similarly and in an efficient manner. This omnichannel approach can be used in combination with any service or solution in our portfolio.

Our Offices

We operate from twelve offices in ten geographies (Singapore, Malaysia, Thailand, Philippines, China, Japan, Spain, India, Colombia and Romania) which (i) allow us to respond to market demand and growth opportunities in domestic, regional and global markets across Southeast Asia and the Global English end-markets (which includes North America, the United Kingdom, Ireland, Australia and New Zealand), China, Japan and Europe; (ii) provides us with access to diverse talent pools; (iii) equips us with multi-lingual capabilities; and (iv) enables us to leverage time zones to provide 24/7 service. A country director leads the operations in each country in which we operate and is responsible for operations and maintaining client relationships within that country.

Our offices are located in accessible and appealing locations which are designed to provide our employees with an enjoyable and productive work experience. Designed to be modern, collaborative and inspiring, our offices have a number of dedicated spaces where our employees can interact and re-energize during the work day, including reading rooms, themed meeting areas and entertainment areas such as music and games rooms. Our culture is key to our ability to attract and retain a motivated and talented workforce and our offices are specially designed to support our culture and employees. Unless otherwise stated, each office represents our entire operations in a given country, but may be spread across multiple premises.

 

   

Singapore—Our headquarters in Singapore was opened in 1995 upon our founding as Teledirect Pte Ltd. As of June 30, 2021, the office supported 18 active campaigns, including campaigns with some of our most established clients. As of June 30, 2021, it was staffed by 1,142 agents. Our Singapore office

 

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services large multinational corporations which have their regional headquarters in Singapore, and certain Singapore government agencies. We provide omnichannel CX solutions, sales and digital marketing services and content monitoring and moderation services from our Singapore office.

 

   

Philippines—We opened our Manila office in 2014 and our Cebu office in 2019. As of June 30, 2021, our Philippines offices supported 17 active campaigns. As of June 30, 2021, they were staffed by 4,270 agents. Our Philippines offices leverage a talented employee pool of proficient English speakers to service Global English end-markets, including North America, United Kingdom, Ireland, Australia and New Zealand. We provide omnichannel CX solutions and sales and digital marketing services from our offices in the Philippines.

 

   

Malaysia—We opened our Kuala Lumpur office in 2001. As of June 30, 2021, the office supported 44 active campaigns. As of June 30, 2021, it was staffed by 2,728 agents. Our Kuala Lumpur office services Southeast Asian and North Asian customers in a variety of regional languages. We provide omnichannel CX solutions and sales and digital marketing services from our Malaysia office.

 

   

Thailand—We opened our Bangkok office in 2005. As of June 30, 2021, the office supported 15 active campaigns. As of June 30, 2021, it was staffed by 1,260 agents. Our Bangkok office serves as our hub in the Indochina region and we support our clients’ operations that require native speakers from emerging markets such as Vietnam, Cambodia and Laos, in addition to Thailand. We provide omnichannel CX solutions, sales and digital marketing services and content monitoring and moderation services from our Thailand office.

 

   

China—We opened our Beijing office in 2017 and our Shanghai office in 2020. As of June 30, 2021, our China offices supported 10 active campaigns and were staffed by 232 agents. Our offices in Beijing and Shanghai primarily supports Mandarin language campaigns for international clients with operations in China. We provide omnichannel CX solutions and sales and digital marketing services from our Beijing and Shanghai offices.

 

   

Japan—We opened our Yokohama office in 2019. As of June 30, 2021, the office supported five active campaigns. As of June 30, 2021, the office was staffed by 324 agents. The office primarily supports Japanese-language campaigns. We provide omnichannel CX solutions and sales and digital marketing services from our Yokohama office.

 

   

Spain—We opened our office in Barcelona in 2018. As of June 30, 2021, the office supported five active campaigns. As of June 30, 2021, it was staffed by 64 agents. This is our first office outside of Asia and the first in Europe. The Spanish office will act as our hub for expansion in Europe. We provide sales and digital marketing services from our Spain office.

 

   

India—We opened our office in Hyderabad in 2020. As of June 30, 2021, the office had not yet commenced operating any campaigns. The India office will act as our hub for expansion in India and service Global English end-markets. We also expect that our India office will be able to serve as a digital hub that will allow us to grow our technology capabilities throughout our Company. We intend to provide omnichannel CX solutions, sales and digital marketing services and content monitoring and moderation services from our India office.

 

   

Colombia—We opened our office in Bogota in 2020. As of June 30, 2021, the office had not yet commenced operating any campaigns. We entered into our first MSA to provide services from our Colombia office in July 2021. This is our first office in Latin America and will act as our hub for expansion in Latin America, as well as into North America, as requested by our clients. We intend to provide omnichannel CX solutions, sales and digital marketing services and content monitoring and moderation services from our Colombia office.

 

   

Romania—We opened our first Eastern European office in Bucharest in 2021. As of June 30, 2021, the office had not yet commenced operating any campaigns. This will serve as a complementary offering to our already established European office in Spain to provide our clients with alternative and

 

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complementary lower cost options for less complex or non-native language campaigns. We intend to provide omnichannel CX solutions, sales and digital marketing services and content monitoring and moderation services from our Romania office.

COVID-19 Risk Mitigation and Continuity of Operations

In response to the COVID-19 pandemic, we have implemented a number of procedures and strategies with the support of our clients. We established an internal COVID-19 task force, which is overseen by our Internal Audit Director. The task force includes representatives from each country in which we have operations as well as each function from our corporate team (such as human resources) and conducts regular telephonic or video meetings to discuss developments in each country’s operations and best practices that are being undertaken by each country to ensure employee safety and continuity of our operations. Our management works closely with our COVID-19 task force to ensure synchronization of the task force and operations throughout our Company organization more broadly. Along with the organizational measures we have taken with respect to our COVID-19 task force, we have also increased the cleaning frequency of our premises and order (as needed) items such as face masks and hand sanitizer for our offices. Finally, in the jurisdictions in which we operate, we have also identified and coordinated with vendors for deep sanitization services in the event any of our employees has been at our premises and contracted the COVID-19 virus. For further information regarding risks related to COVID-19, see “Risk Factors—Risks Related to Our Business and Industry—Effects of the novel coronavirus (COVID-19) as well as any other health pandemics on our and our clients’ business and operations could adversely affect our financial results.”

Employee Safety

The primary focus of our management and COVID-19 task force throughout the COVID-19 pandemic is employee safety. We regularly update our health and safety procedures to comply with local health and safety requirements as they develop. We send regular email updates regarding the pandemic and travel advisories and other measures a relevant jurisdiction may put into place to ensure our employees remain safe throughout the COVID-19 pandemic. With the support of our clients, we have also incorporated work from home policies in all of the jurisdictions in which we operate, subject to our client agreement on a campaign by campaign basis. In each of the jurisdictions in which we operate, we have complied with the local regulatory requirements and guidance with respect to maintaining only essential workforce in the office. At the peak of the COVID-19 pandemic in 2020, approximately 80% of our employees worked at home in accordance with our work from home policies.

Continuity of Operations

We continue to work with our clients to ensure continuity of our operations and minimize any disruption of our services throughout the period of the pandemic. Many of our clients, including some of our largest clients, have asked us to initiate our business continuity plans under our agreements. These plans may include splitting up our teams on specific campaigns among multiple locations within a given jurisdiction, having a certain percentage of employees staffed on a given campaign work from home or having all employees on such campaign work from home, depending on the client and/or agreement. We are fully supportive of work from home programs and have issued the necessary equipment to our employees that work from home in order to support their productivity. We also work with our employees to ensure that they have an adequate working environment to remain productive by consulting with them on conditions appropriate for a “home office.” Working from home guidelines have been provided to our employees to ensure compliance with the required standards for service delivery under our agreements with our clients. We anticipate that the implementation of a continuity of operations plan which includes certain work from home policies may remain in place after the COVID-19 pandemic as part of our continuity of operations procedures generally.

 

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Case Studies

New Economy Client

Situation

 

   

Our client has a large online marketplace, including global operations and access to almost every country in the world.

 

   

Due to its rapid growth over the last five to ten years, our client needed a partner who could keep up with their aggressive global scaling demands without compromising the quality of its customers’ experience.

Solution

 

   

Working closely with our client to formulate the service requirements of our engagement, we provided a tailored solution involving the design and development of scenario-based training programs, with an emphasis on service quality, customer experience and innovation and the dedication of business analytics experts to monitor and analyze customer trends and performance data as they provide actionable insights geared towards process efficiency and innovation.

 

   

In addition, we provided executive sponsorship, including an efficient management to employee ratio as well as the inclusion of a Director of Operations and Director of Support.

 

   

We were also able to provide additional depth in our support to our customer experience offerings by hiring, training and managing highly skilled Mandarin-speaking agents as well as by implementing a dedicated support team to manage overflow of customer support tickets from the onshore support team.

Results

 

   

Our initial engagement in 2015 with the client began with 50 FTEs for omnichannel CX solutions in the Philippines.

 

   

In 2017, we expanded our engagement and began providing services in our Malaysia office. By December 31, 2017, we had over 800 FTEs for this engagement covering services rendered from our Malaysia and Philippines offices. In 2018, we launched operations in China and Japan to support the client.

 

   

Our engagement expanded to include more complex services, such as trust and safety verification for our client’s customers, the incorporation of a dispute resolution process between our client and its customers, as well as conducting global quality and compliance audits of the client’s in-house customer contact team and the other third parties that they have engaged as client experience service providers (including our competitors). We also included native Mandarin and Thai speakers in our service offerings from our Malaysia office.

 

   

We expanded to more than 2,500 FTEs as of June 30, 2021.

Search Engine Client

Situation

 

   

Our client is a leading search engine company. We began providing sales and digital marketing services to our client’s customers in Malaysia with less than 15 FTEs based in our Malaysia office in 2012.

Solution

 

   

We worked closely with our client to deliver services beyond our client’s expectation by routinely exceeding the minimum KPIs required under our agreements with our client.

 

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When our client required us to scale up in terms of project size within a short time frame, we were able to do so by utilizing Flash Hire to evaluate more than 1,500 new employee candidates in order to meet our client’s expanded requirements.

Results

 

   

In 2018 and 2019, our client engaged us to provide sales and digital marketing services to our client’s top-tier customers, which was previously handled entirely by our client’s in-house team.

 

   

As of June 30, 2021, we have been engaged on 35 active campaigns with this client. We provide services to this client from five different countries (Singapore, Malaysia, Philippines, China and Japan), with a total of more than 1,000 FTEs. We provide services to the client’s customers in more than 10 different languages, including Vietnamese, Korean and Japanese.

Sales and Marketing

We market our services primarily through our business development team. Our business development team, which is led by our Philippines country director, has coverage teams for each of the Asia Pacific, North American and European regions. Once opportunities are discovered by the business development team, a dedicated pitch team works with our operating personnel, including our CEO and country directors, to develop proposals and pursue these opportunities. Relationships with existing clients are managed by our relationship managers, who are often the country directors at the locations where our client campaigns are focused and who are in charge of day-to-day operations on client campaigns. Our client relationship professionals collaborate with our operations teams, regional business analytics team and country directors to develop client-focused solutions that we pitch to our clients. Since the operations teams have day-to-day interactions with our clients, they provide valuable insight to our clients’ needs and issues. This allows us to incorporate client feedback quickly into our business development efforts and to tailor our proposals to known client needs.

While our business development team works to generate new leads and new clients, we believe that our growth has primarily been through a “network effect” based on our strong client relationships, client-centric focus and the desirable outcomes we have produced in campaigns for our clients. Our client relationships typically evolve from single, discrete campaigns into multiple and more complex campaigns across multiple client business lines or across new geographies. We focus our business development efforts on clients who require complex, high-value work where we believe we can provide significant value to our client’s operations. We also focus on providing a differentiated level of service, which we believe enables us to grow our business together with the growth of our clients’ businesses and grow our share of our client’s wallet. This also provides us with higher profit margins. We believe that expanding the services we provide to existing clients helps meet this goal because we have already firmly established our competencies and a basis of trust with our clients. See “—Case Studies.”

The process for developing a new client or securing a new campaign typically begins with a formal request-for-proposal or a less formal request by a client to consider an issue they are facing. We also propose new campaigns based on client needs that our operating teams uncover. The business development team works with the operating teams to define the scope, services, assumptions and execution strategies for a proposed campaign and to develop campaign estimates and pricing and sales proposals. Senior management personnel typically are involved in the development of each proposal. The sales cycle varies depending on the type and size of service required and generally ranges from six months to over a year.

Contracts and Pricing Model

Our contracts are typically structured as a master service agreement that embodies the key terms of our engagement with our clients. Many of our clients have their own standard master service agreement, or MSA, templates they use with their service providers but we have a MSA template that caters to clients who do not have their own templates.

 

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Each client’s campaign is defined under a SOW, which sets out the services to be provided for each client campaign (including price, FTEs deployed, service level agreement and technical specifications). A SOW may also contain clauses that supersede the terms of the MSA as necessary for each campaign. This structure allows us to quickly define and implement new client campaigns as they come up without protracted legal discussions, which have been undertaken upfront in the MSA.

Our MSA contract terms typically range from one to three years, with new economy clients typically preferring one-year renewable contract terms. Our contracts also generally provide our clients a right to terminate any engagement at any time for convenience, subject in some cases to prior written notice. Typically, there are no amounts payable upon early termination. As we become more familiar of our clients’ businesses, we take advantage of opportunities to expand across the value chain and provide new and increasingly complex digital offerings to them via multiple channels to improve their processes. This in turn builds our clients’ confidence in us and encourages them to continue using our services.

Our contracts typically specify service levels that we must provide, as reflected by target key performance indicators selected by our clients according to their internal policies or requirements. Some examples of key performance indicators used by our clients are customer satisfaction and turnaround time. In the last five years, we have generally met our KPI requirements in most campaigns and none of our clients has terminated their respective agreement on the basis of consistent underperformance of KPIs.

Over the years, our pricing model has been modified, in part, based on industry trends and feedback we have received from our clients. Our current model includes a fixed rate per FTE and a variable price component that is based on meeting certain KPIs assessed periodically. Our pricing models for any given arrangement often include a fully priced rate per FTE or productive hour, subject to potential increases or deductions based on KPIs.

Clients

As of June 30, 2021, we were engaged by 43 clients, many of which are leaders in their respective industries and demand best-in-class service from their outsourcing partners. We have clients in a wide variety of industries which we organize under our ten industry verticals, including: (1) travel and hospitality, (2) digital advertising and media, and (3) fast-moving consumer goods. Our client base includes both long-standing marquee clients, as well as an expanding client base of new economy clients. Since 2012, when we acquired our first new economy client, new economy clients grew to contribute up to 66.8%, 82.5%, 87.8%, 86.8% and 92.2% of our total revenues for the years ended December 31, 2018, 2019 and 2020 and the six months ended June 30, 2020 and 2021, respectively. See “Risk Factors—Risks Related to Our Business and Industry—Our largest clients account for a significant portion of our revenue and any loss of a large portion of business from any of those large clients could have a material adverse effect on our business, financial condition and results of operations.”

We have intentionally created an inclusive and diverse workplace culture that is compatible with that of our clients, and in particular, our new economy clients. We strive to assimilate into the local culture of the markets we serve and also create cultural alignment with our clients, which emphasizes a sustainable and collaborative approach to business and our five core values of (i) teamwork, (ii) innovation, (iii) courage, (iv) initiative and (v) trust. See “—Employees and Culture.” We believe that this cultural compatibility is often a key reason for our clients selecting us as a services provider. For example, in our first project serving customers in China, our U.S.-based client emphasized that our cultural alignment was a factor in us being selected over other service providers with strong China-focused capabilities.

We believe that the services we provide to our clients are often mission-critical to their businesses. As a result, our clients often deeply integrate us into their customer service offerings. For a discussion of our revenue by geographic segment see “—Our Services and Solutions.”

 

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As part of the process for acquiring a new client, potential clients audit our business. After being awarded any new campaign, our clients will also periodically follow up with compliance audits, including audits conducted by third parties. We also have regular informal feedback from our clients on an ongoing basis. While the specific audit process varies from client to client, each client will typically conduct both a process and execution audit annually. Process audits typically cover a variety of areas, including cost management and invoicing accuracy; operational management including regular updates, clear roles and responsibilities; and information security management. Execution audits are mainly based on quantitative measure such as service-level and first-call resolution to evaluate customer care efficiency, operation efficiency and customer feedback.

Innovation and Development

We consider the innovation and development of new products and services to be an important part of our ability to provide high-value services to our clients. We conduct all of our innovation and development activities in-house through a dedicated digital innovation team, Digital Lab, located in Malaysia and India. As of June 30, 2021, our Digital Lab team included approximately 39 employees and focused on six areas, namely design, content generation, digital marketing, social media, tech, research and development. The development team focuses on building tools using artificial intelligence and machine learning to augment the delivery of the desired customer experience. We recently expanded our presence in Hyderabad, India. We have received numerous awards relating to our research and development efforts. See “—Awards and Recognition.”

In the last few years, we have developed a number of innovative tools that enhance our service offerings, such as the TDCX mobile dashboard app, the Flash Hire platform, AI-enhanced chat-bots and remote video support. We also enhanced productivity with robotic process automation and our enterprise data warehouse and we have also developed a remote monitoring application for security and fraud detection, which is in currently in prototype form. For more information on these tools, see “—Information Technology and Management Information Systems.”

Competition

Our core competitors are other digital customer experience providers as well as our clients’ own internal capabilities to perform some or all of the services that we provide. Fast-growing new economy clients tend not to have significant in-house capabilities equivalent to the services that we offer as a specialist and instead rely on one or more outsourced digital customer experience providers. We typically are not an exclusive service provider for our new economy clients as they prefer to engage more than one provider in each customer region to reduce their provider concentration risk. A key consideration for these new economy clients in choosing a digital customer experience vendor has been the speed and flexibility of such vendor in scaling with, and responding to changes in, the client’s business.

According to Frost & Sullivan, the customer experience outsourcing market in Southeast Asia is mature and fragmented as the top 15 service providers capture only slightly more than half of the market share by revenue. In the area of omnichannel CX solutions, we compete primarily against traditional customer experience service providers, boutique customer experience service providers, and, to a lesser extent, pure-play outsourcing service providers.

See “Industry Overview” and “Risk Factors—Risks Related to Our Business and Industry—We operate in a highly competitive environment, and any failure to compete effectively against current and future competitors could adversely affect our revenue and profitability.”

Our competitive advantage is that we are an internationally integrated, human-capital-centric provider of digital customer experience solutions, to our clients with a specific expertise in providing tailored solutions and managing complex new economy interactions.

 

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We expect that competition will increase and potentially include companies from other countries that have lower personnel costs than those in the countries we operate. A significant part of our competitive advantage is our ability to attract, train, and retain talented personnel. In addition, relative to competitors in the United States and Europe, as a service provider primarily located Southeast Asia, we have a wage cost advantage.

All comments in this prospectus with respect to our competitors are based on information available in the public domain or provided by Frost & Sullivan. We have no access to, nor do we seek, our competitors’ commercially sensitive information.

Employees and Culture

We believe that our employees and our distinctive corporate culture are key enablers to our success and form the core strength of our business model and a strategic pillar to our competitive advantage. Our corporate culture is designed to foster a work environment that attracts, develops and retains a highly skilled workforce that can effectively engage in complex new economy interactions. As of June 30, 2021, more than 60% of our employees were college or university graduates. We focus on reinforcing a culture that emphasizes a sustainable and collaborative approach to business while being fully committed to our clients’ businesses. Our commitment to the growth and well-being of our employees is important to our success and we monitor our employee satisfaction to evaluate our performance in supporting our employees. In the internal engagement surveys we conducted in July 2020 and 2021, we received an employee satisfaction score of 87% and 89%, respectively, from our employee respondents. We believe that our distinctive culture is incorporated within all relationships and processes in our organization and fits within our values and goals.

Our culture is defined by five core values: (i) teamwork, (ii) innovation, (iii) courage, (iv) initiative and (v) trust, as illustrated below:

 

LOGO

We recognize that our success in delivering complex and high-value services to our clients has come from our ability to identify, recruit, train and retain a highly motivated workforce. A highly trained and skilled workforce allows us to provide higher quality and higher margin services and solutions to our clients. The critical success factor is to ensure that our entire leadership is aligned with the drivers of our culture that best fit into our business

 

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strategy and vision. To that end, we have developed key guiding principles across five areas that reinforce and exemplify our core values: (i) Recruiting and Selection, (ii) Retention, Employee Engagement and Compensation, (iii) Learning and Development, (iv) Compliance and Control and (v) Performance.

Recruiting and Selection

We use an iterative process of hiring with multiple screening processes, including online assessments and behavioral interview techniques to select employees who will be successful at our Company. We believe our hiring decisions are consistent and consensus driven among panel interviewers. We use online interview platforms, such as our proprietary system, Flash Hire, to video record interviews so that interviews follow a uniform set of questions and multiple internal stakeholders and clients can participate in the interview. Flash Hire automates many of the routine administrative tasks from recruitment and shortens our hiring time by more than half. For example, during the phased implementation of Flash Hire in our business, we operated both the Flash Hire and the traditional hiring workflows. In the traditional workflow, the average time to hire a new employee in 2019, from the date of their initial application to the date we made an offer of employment, was 3.52 months. By comparison, when using the Flash Hire workflow, the average time to hire a new employee in 2019 was 1.33 months, a 62% improvement over the traditional workflow. We focus on hiring an international mix of expatriates and native language speaking employees.

We primarily recruit our employees through advertising on job boards and employee referrals. We focus on employee referrals, which we think helps us identify candidates who would fit within our Company culture and assimilate into the team. From July 1, 2019 to June 30, 2021, over 70,000 job applicants were referred to us by our employees and more than 13,000 were successfully hired. We also use external recruitment agencies to help us hire employees in the new markets that we enter as well as to quickly scale up our hiring for new projects.

With our scalable business platform and our fast response time for the implementation of new client campaigns, we focus on both our ability to quickly staff a campaign and our ability to hire the right candidate who fits our criteria.

Retention, Employee Engagement and Compensation

In the year ended December 31, 2018, 2019 and 2020, our annual voluntary attrition rate, measured by the number of employees that voluntary left our Company in a period divided by the average number of employees in such period, was 21.5%, 23.1% and 24.8%, respectively, compared to the industry average of 30% to 34% in the Asia Pacific region, according to Frost & Sullivan.

Our dedicated engagement teams operate various employee engagement programs to promote retention. Our retention program begins as early as an employee’s first month with us. All employees go through a one-day induction program, conducted by our engagement champion team. Our induction program is also available online for new employees that work from home. The induction program introduces our Company’s history, mission, vision and values to the new hires. The program also promotes the formation of new friendships among the new hires, which we find helps increase employee engagement and retention.

We monitor our employee engagement through weekly employee engagement surveys conducted through our Flash Pulse platform that enable our management to understand and quickly address concerns of our employees. In 2020, we started conducting weekly internal surveys that asked five matrix questions each week, which increased survey participation compared to our previous comprehensive bi-annual surveys. The increased frequency and the broad range of topics covered over time has allowed us to develop a more timely and complete understanding of our workforce feedback to develop actionable plans to address any gaps.

Each of our client campaign teams has a dedicated human resources manager and engagement champions who are responsible for the wellbeing of that campaign team. We encourage wellness by promoting a sense of community among our employees. We believe that this sense of community is particularly important to our

 

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employees, especially employees under 35, who represent over half of our employees, and our expatriate employees who often relocate to join our Company. Our engagement team also organizes regular wellness events to promote physical and mental health, such as yoga and meditation and we have continued to provide these during the COVID-19 pandemic through online sessions. We also offer free annual health check-ups and employ psychologists for our content monitoring and moderation teams to help them deal with the particular stresses of content monitoring and moderation.

We pay our employees on a salary basis, with additional bonuses and incentive payments depending upon the client and campaign. Benefits include transport allowance, medical insurance, social security, telephone allowance and onsite food and refreshments at our physical offices.

Learning and Development

We believe that the opportunity for advancement is one of the key factors supporting our long-term employee retention. As of June 30, 2021, we have a team of over 200 trainers that lead our new employee initiation programs, client-campaign-specific training programs and our internal development programs.

New employees undergo an initial training program of up to three months when they join us. This training program is designed to instill our corporate values and culture from day one. It also helps our new employees understand the work we do as well as how to undertake that work competently and in accordance with regulatory frameworks governing data privacy such as the General Data Protection Regulation (GDPR EU) and the Personal Data Protection Act 2012, No. 26 of 2012 of Singapore. Campaign-specific training programs that provide staff with specific knowledge of our clients’ products, services, procedures and systems are developed in cooperation with our clients during project set-up. Throughout the life cycle of the campaign, our learning and development team continues to work with the client to refine and improve the programs to ensure that our services meet our client’s rigorous standards. Some campaign-specific-training programs involve up to an additional six months of training before an employee is fully integrated into a campaign team. Our employees’ customer knowledge is supported by our Knowledge Base Tool, or KB Tool, which is a digital product library and user portal that provides our employees quick and easy access to client-specific information they need to handle customer interactions. The KB Tool is regularly updated with information learned from our direct experience on client campaigns. We also use third-party tools such as LinkedIn Learning to connect and conduct general training sessions with our employees.

We also believe that personal and career developmental opportunities are important to the success of our business. Our commitment to having a highly skilled workforce and ability to compete on quality includes ensuring our employees throughout our Company have the necessary tools, skills and support to effectively do their job and build a career. Our internal surveys, which we conduct through our Flash Pulse platform and which are based on self-reported employee information, show that: 87% of our employees felt that they had opportunities to grow and learn; 87% of our employees received encouragement for their career development, 98% of our employees knew what is expected from them; and 96% of our employees strongly understand and aligned their work to the vision and mission of our Company.

As a growing organization, we recognize that our leadership pipeline is critical to our future success. Our employees have access to a wide range of classroom courses including functional skills, leadership skills and data analytics programs provided by our internal learning and development department to ensure that they are equipped to deliver complex and high-value services for our clients. We provide additional training on performance analytics and on-demand knowledge modules through our Flash Learn platform, which contains recorded presentations, quizzes and interactive modules on key skills such as compliance and security, self-management, inter-personal relations, leadership and business development. Many of our employees have received COPC CX Implementation Leader certifications offered by COPC, Inc., an industry leader in customer experience operations qualifications. Our Malaysian office has received an ISO 18295:2017 certification for customer contact center operations. We also have over 1,000 employees with Google Ads certifications as of June 30, 2021, which includes employees that have been certified pursuant to client requirements.

 

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We utilize the GROW coaching method, which is a goal-oriented best practice for employee development and delivered through our Flash Coach application. GROW stands for (1) Goal, (2) Current Reality, (3) Options (or Obstacles) and (4) Will (or Way Forward). All of our managers and team leaders receive training in the use of the model and coaching sessions are documented and tracked using our in-house coaching tool. The GROW model is central to our approach to staff development.

Performance and Compliance

We depend on our ability to consistently perform to the highest standards. In addition, we are typically required to provide certain minimum thresholds of service quality under our client contracts. Our performance tracking is enhanced by our real-time data reporting and analysis, which helps us identify issues with individual and campaign level performance. Our team leaders conduct weekly evaluations with our team members based on our data analysis of key performance indicators.

The performance and compliance metrics that we track vary by client and campaign. Generally with respect to our omnichannel CX solutions, we track metrics over five key areas: quality, accessibility, efficiency, cost performance and strategic impact.

Quality metrics measure subjective quality of the services we provide from the point of view of the customer. Some examples include customer satisfaction scores, which rate customer happiness with a given interaction, first contact resolution, which measures whether or not a problem was resolved in the customer’s first interaction with us, customer effort scores, which measures the ease in which the customer was able to obtain answers from us, and net promoter scores, which rates the likelihood that a customer would recommend our service to others.

Accessibility scores measure how easy it is for customers to reach us. These scores are typically objective, and include service-level scores, which measure the number of calls answered within a certain number of seconds (i.e., 80% of all calls answered in 20 seconds (or approximately three telephone rings)), abandoned call rate, which is the number of callers who hang up the phone before the call is answered, and turnaround time, which measures the speed in which we complete a ticket or close an issue logged by a customer.

Efficiency metrics measure resource wastage and redundancy, and include metrics such as forecast accuracy, which measures how actually call and interaction load compare to the forecasted load, and average handling time, which measures how long it takes on average to resolve a customer interaction.

Cost performance metrics measure the cost per interaction, which can be lowered by increasing operational efficiency.

Strategic impact metrics measure the ability of our operations to deliver sustainable performance, and include items such as employee engagement scores and employee attrition.

We also track many campaign-specific metrics. For example, for sales calls, we track our contact rates (the percentage of people in our target list we were able to reach) and our conversation rate (the percentage of contacted persons who chose to buy the product being sold). With respect to technical support campaigns, we track items such as the technical service resolution rate (what percentage of problems did we resolve remotely) and the no parts used rate (the percentage of onsite service requisitions which were unnecessary since they did not require any replacement of parts).

 

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Employees by Position and Geographic Location of Office Providing Services

The following table sets out the number of our employees by job classification:

 

     As of
June 30,
     As of December 31,  
     2021      2020      2019      2018  

Agents(1)

     10,020        9,128        7,213        4,608  

Project Support

     2,282        1,361        1,365        678  

Support Staff

     1,006        862        636        445  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     13,308        11,351        9,214        5,731  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Note:

(1)

Under our employee classification system, a FTE under our MSAs and SOWs is classified as an “agent.”

The following table sets out the number of our agents by the geographic location of the office providing services.

 

     As of
June 30,
     As of December 31,  
     2021      2020      2019      2018  

Singapore

     1,142        1,092        913        821  

Philippines

     4,270        4,265        2,847        1,596  

Malaysia

     2,728        2,140        1,876        1,244  

Thailand

     1,260        1,178        881        695  

China

     232        181        493        217  

Japan

     324        229        190        35  

Spain

     64        43        13         

India(1)

                           

Colombia(1)

               

Romania(1)

                           
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     10,020        9,128        7,213        4,608  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Note:

(1)

As of June 30, 2021, the office had not yet commenced operating any campaigns.

The following table sets out the number of our total employees by the geographic location of the office providing services or conducting operations.

 

     As of
June 30,
     As of December 31,  
     2021      2020      2019      2018  

Singapore

     1,362        1,278        1,099        986  

Philippines

     5,464        4,692        3,542        2,003  

Malaysia

     3,722        3,102        2,552        1,586  

Thailand

     1,902        1,633        1,180        848  

China

     331        284        580        267  

Japan

     411        295        233        40  

Spain

     90        59        28        1  

India

     15                       

Colombia

     9        8                

Romania

     2                       
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     13,308        11,351        9,214        5,731  
  

 

 

    

 

 

    

 

 

    

 

 

 

The delivery center location out of which the Company provides services (and from where our employees and agents provide services) does not correlate consistently to the location of the customers of the Company’s clients.

 

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For example, a particular delivery center location may provide services to client A’s customers in North America, while a different delivery center location may provide services to client B’s customers in North America, as these determinations vary based on client choices, relevant skills, particular campaigns and other considerations. Delivery center locations out of which the Company provides services to a particular geography may also vary from period to period, client to client and service to service. Moreover, customers of the Company’s clients may access the Company’s services from various geographies and not just the location of their residence.

We hire primarily permanent employees for our campaigns, though we may hire temporary employees on fixed-term contracts. We do not match employee contract durations to campaign duration and we assign our employees to other campaigns at the end of a client engagement. Substantially all of our employees are employed on a full-time basis.

As of the date of this prospectus, our workforce in Spain was under the Spanish telemarketing industry’s collective bargaining agreement.

Information Technology and Management Information Systems

The technologies we utilize in the delivery of our services are a mix of licensed software, proprietary, in-house developed software, and software provided by our clients. We have a flexible, scalable and reliable technology platform that enables us to deliver customizable services and solutions for our clients in line with their business requirements. Our information technology team includes experts on technology project management, infrastructure management, information security and operational service delivery, thereby permitting us to adapt our infrastructure services to our clients through various phases of our clients’ engagements.

Flash

Flash is our in-house 360-degree human capital and experience management suite. Flash brings together a whole gamut of platforms to drive efficiency within our key human resources functions and processes. These include workforce management, recruitment, performance management, learning and development, employee engagement, rewards and recognition, chatbot, claim and payroll.

Flash Hire, is our flagship application within the Flash suite. Flash Hire is a highly customizable remote, video-based recruitment platform which we use to record video assessments, provide written assessments and conduct live interviews. The system provides a question bank and customizable assessments which are tailor-made for each client’s operating environment. The system auto-learns from the success profiles of our best performers to improve our hiring process. Flash Hire allows us to video-record interviews for the benefit of our clients, asking behavioral questions based on job expectations and clients’ inputs. This allows us to interview candidates in local time zones yet enables clients to view these interviews at any preferred time in their own time zone. This allows our clients to provide input on the employees that will be staffed on their campaigns and creates trust with our clients since they get to participate in the hiring process and ensure that we are calibrated and hire personnel not only with the relevant skills and knowledge, but who also fit within our culture. In particular, the system allows us to recruit expatriate candidates more efficiently, since it allows us to interview candidates across jurisdictions quickly and effectively and track and monitor the overall recruitment process.

The system also digitized our recruitment process and helped to reduce the amount of administrative work involved in recruiting by providing commenting and other collaboration procedures to allow the recruitment team to evaluate candidates. The system supports data analytics, as well as automated our end to end recruiting process, including requisition, job applications, interview scheduling, interviews, offer development, documents submission, candidate onboarding capabilities and online contract signing. Overall, we believe that the system reduces the amount of time it takes to recruit a new hire by up to half.

 

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Since implementing Flash Hire into our workflows, we have used it to evaluate over 70,000 candidates as of June 30, 2021. As an internally developed product, it has also enabled significant cost savings compared to external products, which have many of the same functions, but charge on a per-interview basis. For us, Flash Hire is scalable at minimal additional cost.

We developed a predictive model that evaluates the resume and personality traits of our candidates using a competency value framework to determine if they are suitable for the job based on the ideal high performer profile. The model in Flash Hire will be able to support our recruiters’ hiring decision based on the system’s recommendation. The model will match the candidate’s profile to the ideal high performer profile based on each job family such as customer service, sales roles or content moderator role. This model will be able to provide a fit dashboard and behavioral pointers of high-risk candidates to assist recruiters in their hiring decisions.

We are excited about Flash Hire as the next stage of development sees the enablement of speech analytics and voice recognition for authentication and emotional overlaying on spoken response. We believe that coupling speech analytics and emotional analytics with facial recognition and options for work at home agents will bring Flash Hire to the forefront of technological innovation in selection and hiring.

Our Flash suite of applications also includes the following:

 

   

Flash Coach is a platform that our leaders use to document and monitor coaching sessions with their teams. The large amounts of data captured are processed using AI so we can clearly and systematically determine developmental priorities.

 

   

Flash Learn complements our innovative hiring and coaching programs with a detailed online learning and training program. Our adaptive approach allows us to easily share knowledge across multiple geographies, whether we are working from the office or remotely.

 

   

Flash Game is our new staff engagement platform being piloted in several countries. This mobile application supports engagement activities amongst our staff remotely in the form of simple games and quizzes.

 

   

Flash Pulse is another new engagement platform being piloted in several countries. The conventional employee satisfaction surveys are conducted annually. As a result, employers may not always be able to respond to and address issues and concerns in a timely manner. With Flash Pulse, we now conduct weekly pulse checks with very short surveys, typically two to three questions allowing us to get regular insights into the sentiments of our employees in real time.

 

   

Flash Home is our human resources information system that covers workforce management, performance management, employee communication, knowledge base management, and reporting. This platform enables complete employee and manager self-service for managing the personal and job profile information of our workforce. In addition, our career ambassador platform under Flash Home provides engagement between mentors and mentees.

 

   

Flash Pay is our online solutions supporting payroll services.

 

   

Flash Chat is our online human resources chatbot, piloted in Malaysia and soon to be rolled out globally, which gives our employees easy access to information on human resources related topics. This platform will automate all responses to frequent employees’ queries 24 hours a day, seven days a week.

FalconEye

FalconEye is our full service remote working platform. We developed FalconEye to make it easier, more secure and more efficient for our agents to work remotely. FalconEye combines our virtual help desk, algorithm configuration and other performance tools with people management and data security tools. We believe FalconEye provides our teams everything they need to work from home.

 

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TeleSmart CRM

Our TeleSmart CRM platform allows multi-stakeholder case management, online knowledge base management, automated SMS-based follow-up, automatic inbound and outbound email coverage and online data analytics that allow managers and our clients to review real-time performance indicators. The platform’s ability to analyze the data from customer interactions allows us to perform root cause analysis on possible client product issues. For example, through the use of keywords analysis presented through various social media channels and customer interactions, along with sentiment analysis, we were able to successfully identify product issues relating to a fast-moving consumer goods client and notify them of such an issue. In another example, we were able to analyze the responses and feedback collected from customers, and identify underlying issues related to one of our client’s products, in the consumer electronics sector. As a result, the client had sufficient time to develop a product fix and initiate product recall and replacement for all affected customers. A key feature of the system is its ability to integrate with established telephony system platforms, chat visualizers and email services in order to provide an omnichannel view of customers for our clients.

TDCX Mobile Dashboard App

Our TDCX Mobile Dashboard App provides easy access to key metrics for client campaigns such as service levels, call and contact volumes, among others. Prior to the implementation of this app, daily performance reports were compiled in spreadsheets and distributed to clients via email, which was tedious to prepare, error-prone and subject to time lag. Our TDCX Mobile Dashboard App was created to streamline the delivery of performance data to clients for their campaigns. Clients can access campaign dashboards on iOS and Android devices. The interactive dashboards allow clients to compare metrics (whether daily, weekly or monthly), to analyze trends and progression over time, and drill down on specific parameters for more detail. The dashboard is fully integrated with our analytics systems and is fully automated.

Browser-based Video Chat Platform

We have created a browser-based video-support platform based on a third-party programming interface that uses hyperlink technology for quicker set-up and authentication compared to other video-chat support technologies, which require end-customers to install new apps on their mobile device. Nexmo provides APIs which allow us to send text messages to customers. The video-support function allows live interaction with customers, which provides more dedicated and immediate addressing of customer feedback. For example, it allows us to view the issues with a client’s products directly, so that we can provide on-the-spot solutions in certain situations to our clients’ customers. This has decreased the cost to our clients by reducing the number of occurrences when the shipment of non-defective products back to our client for support is necessary.

Licensed Technologies and Other Third-Party Technologies

We are also rolling out AI-enhanced chat-bot functionality, based on licensed technologies, which is currently live with two clients. These are hybrid chat-bots that can automatically handle customer interactions but can also seamlessly hand contact over to human staff to manage more complex situations. This allows us to provide a higher level of service at a lower cost.

We deploy web-based robotic process automation technologies licensed from Automation Anywhere, which allows us to automate many of our routine business processes. As of June 30, 2021, we have implemented over 80 automation bots, including information gathering, data entry, data monitoring and validation and quality control processes. The robotic process automation technologies are fully integrated with our internal systems so that all information flow is automated. These technologies have been particularly helpful in report generation, where business analysts may need to refer to reports generated by as many as seven different systems to prepare information for our clients. These systems have automated tedious, repetitive, time-consuming activities that were prone to human error.

 

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We also license various contact center platforms and technologies, such as automatic call distributors, from vendors including Avaya, Aspect, Asternic and Vicidial. We also use the NICE platform to record calls for quality assurance. NICE also provides our workforce management platform which can integrate with our automatic call distributors, to provide a historical record of our interactions, leading to more accurate forecasting and scheduling of our workforce up to three months in advance. We use sophisticated tools coupled with our proprietary technology to drive accuracy for scheduling and traffic arrival patterns estimates. For general back-office functions, we employ SAP Business One, as a business management software which we use for our finance and accounting functions, SAP Success factors, as our human resources information system; and Syncpay, our cloud payroll software application. We have also licensed other products that integrate with our proprietary systems, such as Zendesk CRM and Nexmo which integrate with our video chat functions, Twilio, a cloud communications platform, which integrates with Flash Hire and our browser-based video chat platform, and Google Cloud for data backup.

We often utilize the software platforms developed or implemented by our clients. Many of our clients, particularly our new economy clients, have their own licensed or proprietary customer relationship management or call management software packages that they have implemented. We utilize these systems and integrate them with our internal technology to form a seamless part of our clients’ customer management systems.

Databases and Infrastructure

An integral feature of our Flash Hire, TDCX Mobile Dashboard App and TeleSmart CRM systems is the use of a relational database management system, which gives us the ability to run customizable reports using a variety of reporting engines.

We believe that our infrastructure redundancy, security and capacity is, at a minimum, consistent with the standards of our industry generally. We work closely with several leading original equipment manufacturers and principal technology partners to ensure our infrastructure is able to support our current operations and expected growth. The robustness of our telecommunications network has allowed us to achieve high levels of network availability for day-to-day operations.

Our business continuity management plan includes strategies to mitigate certain inherent risks and failures in critical platforms and applications by using a combination of redundancies and resilience in our technology infrastructure, telecom networks and distributed computing, relying on a combination of state-provided and privately owned power sources, a distribution of work between our multiple service delivery centers and multi-vendor transportation and logistics management. We also employ a dedicated team of trained professionals to help maintain continuity in Singapore, the Philippines, Malaysia and Thailand, where we have reached a critical mass to necessitate such a structure. We typically operate across multiple buildings in the same city to avoid building-related outages, and we employ power backups in the form of heavyweight uninterruptible power supply systems backed by diesel generators. We also have the ability to provide backup sites across our network and from one country to another, where our clients make their global automatic call distributor platforms available to us.

We have received certifications such as ISO 9001:2015 and ISO 27001:2013 for optimal management of various aspects of information security, including personnel, physical, systems and facility security. Our information security framework takes into account compliance requirements and protection of our clients’ and their customers’ information. We work on the principle of storing no customer data wherever possible in order to keep customer data and data privacy on the networks of our clients. Most clients do not require us to store customer data. Where we do, all reasonable efforts are made to secure such data, by keeping the data on servers in our data centers which are physically and logically partitioned and protected. All our clients are on separate virtual-local area networks and are logically partitioned from one another. Client contracts usually specify data protection obligations and levels of data protection.

On a physical level, all our locations have security-controlled access that is restricted only to personnel who have a need to be present on the call floor for operational reasons.

 

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Intellectual Property

In November 2019, we rebranded ourselves as “TDCX” and began providing services using our “TDCX” trademark. There are trademark registrations in eleven jurisdictions in the name of TDCX Holdings Pte. Ltd.: Singapore, Malaysia, Hong Kong, the Philippines, China, the European Union, the United Kingdom, Japan, India, Colombia, and the Cayman Islands. There are pending applications for trademark registration in three jurisdictions: Thailand, the United States and South Korea. There are also trademark registrations in the name of a subsidiary in China.

Our contracts usually provide that all intellectual property created for the use of our clients will automatically be assigned to our clients. We also use our clients’ software systems and third-party software platforms to provide our services. We customarily enter into licensing and nondisclosure agreements with our clients with respect to the use of their software systems and platforms.

Facilities

Our corporate headquarters is located in Singapore and, as of June 30, 2021, we leased properties in Singapore, the Philippines, Malaysia, Thailand, China, Japan, Spain, India and Colombia. Our largest footprint in terms of leased property spaces that support our operations are the Philippines, where we lease approximately 256,706 square feet, Malaysia, where we lease approximately 172,311 square feet, and Singapore, where we lease approximately 96,245 square feet and includes our corporate headquarters.

In addition, we have obtained a right to use facilities in Romania from a co-working space provider. Once we have established business in a new geography, as part of our scaling process, we will enter into leases in order to support our operations.

Awards and Recognition

Since our founding, we have received over 270 awards to date, including:

 

   

Innovative Achievement in Growth – Silver Stevie Award. Awarded by Asia-Pacific Stevie Awards to TDCX Philippines in 2021;

 

   

Best Outsourced Contact Centre Of The Year (Above 100 Seats) – Gold Award—Awarded by 20th Contact Centre Association of Singapore International Contact Centre Awards to our Singapore office in 2020;

 

   

Best Companies to Work for In Asia 2020—Awarded by HR Asia Award Philippines to our Philippines office in 2020;

 

   

Best Companies to Work for In Asia 2020—Awarded by HR Asia Award Thailand to our Thailand office in 2020;

 

   

Best Employer Branding – Silver Award—Awarded in the 15th Employer Branding Awards by Asia Recruitment Award to our Malaysia office in 2020;

 

   

Most Attractive Graduate Employers To Work For in 2021 (Ranked Third in the BPO Category)—Awarded by Graduates’ Choice Award to our Malaysia office in 2020;

 

   

Top 100 Asia’s Best Employer Brands—Awarded in the 14th Employer Branding Awards by the Employer Branding Institute to our Malaysia office in 2019;

 

   

Best Companies to Work for In Asia 2019—Awarded by HR Asia Award Philippines to our Philippines office in 2019;

 

   

Malaysia’s Best Employer Brand Award—Awarded by World HRD Congress to our Malaysia office in 2019;

 

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Best Supplier—Value Add and Innovation Award for Global Customer Care– Awarded by a search engine client to our Malaysia office in 2019;

 

   

Great Place to Learn Certification—Awarded by Great Place to Work Institute & SkillsFuture Singapore to our Singapore office in 2019;

 

   

Great Place to Learn Certification—Awarded by Great Place to Work Institute & SkillsFuture Singapore to our Singapore office in 2020;

 

   

CEO Service Excellence Award—Outstanding Partner—Awarded by an airline client to our employee in our Singapore office in 2019;

 

   

Winner for Enterprise 50 Award—Awarded by KPMG and Business Times to TDCX HPL in 2019;

 

   

17th Annual Ernst & Young Entrepreneur of the Year in the Outsourced Solutions category – Awarded by Ernst & Young Singapore to our Founder in 2018;

 

   

Asia’s Best Employer Brand Award—Awarded by World HRD Congress to our Singapore office in 2018; and

 

   

Most Innovative Productivity Solution – Silver Award—Awarded by 18th Contact Centre Association of Singapore International Contact Centre Awards to our Singapore office in 2018.

Insurance

We maintain property insurance policies covering our equipment and facilities in accordance with customary industry practice. We carry occupational injury, medical, pension, maternity and unemployment insurance for our employees, in compliance with applicable regulations. We do not carry general business interruption or “key person” insurance. We will continue to review and assess our risk portfolio and make necessary and appropriate adjustments to our insurance practices to align with our needs and with industry practice in Singapore and in the market in which we operate.

Litigation and Other Legal Proceedings

As of the date hereof, we are not party to any significant proceedings.

 

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REGULATORY ENVIRONMENT

Due to the geographic diversity of our operations and services, our operations are subject to a variety of rules and regulations. We are subject to all of the local regulations generally applicable to businesses in the jurisdictions in which we operate, including with respect to employment, health and safety, competition, tax and other regulations. We set out below brief descriptions of certain regulations particularly significant for our operations. See “Risk Factors—Risks Related to Countries Where We Operate—Developments in the social, political, regulatory and economic environment in the countries where we operate, may have a material and adverse impact on us.”

Singapore

The Personal Data Protection Act 2012, No. 26 of 2012 of Singapore (the “PDPA”) generally requires organizations to give notice and obtain consents prior to collection, use or disclosure of personal data (being data, whether true or not, about an individual who can be identified from that data or other accessible information), and to provide individuals with the right to access and correct their own personal data. Organizations have mandatory obligations to assess data breaches they suffer, and to notify the Singapore Personal Data Protection Commission (“PDPC”) and the relevant individuals where the data breach is of a certain severity. The PDPA also imposes various baseline obligations on organizations in connection with permitted uses of, accountability for, the protection of, the retention of, and overseas transfers of, personal data. In addition, the PDPA requires organizations to check “Do-Not-Call” registries prior to sending marketing messages addressed to Singapore telephone numbers, through voice calls, fax or text messages, including text messages transmitted over the Internet.

The PDPA creates various offenses in connection with the improper use of personal data, certain methods of collecting personal data and certain failures to comply with the requirements under the PDPA. These offences may be applicable to organizations, their officers and/or their employees. Offenders are liable on conviction to fines and/or imprisonment. The PDPA empowers the PDPC with significant regulatory powers to ensure compliance with the PDPA, including powers to investigate, give directions and impose a financial penalty of up to S$1 million. In addition, the PDPA created a right of private action, pursuant to which the Singapore courts may grant damages, injunctions and relief by way of declaration, to persons who suffer loss or damages directly as a result of contraventions of certain requirements under the PDPA.

The PDPA was last amended by the Personal Data Protection (Amendment) Act 2020, which is only partially in force. As of the date of this document, key portions of such Act not yet in force include a requirement for organizations to transfer personal data of an individual to a different organization where requested by the individual (generally referred to as “data portability”), and for organizations with more than S$10 million annual turnover in Singapore, the maximum financial penalty the PDPC may impose will increase to 10% of their annual turnover in Singapore.

The Employment of Foreign Manpower Act, Chapter 91A of Singapore, provides that no person shall employ a foreign employee unless the foreign employee has a valid work pass. Work passes are issued by the Controller of Work Passes.

The Employment Act, Chapter 91 of Singapore, or the Singapore EA, prescribes certain minimum conditions of service that employers are required to provide to their employees, including (i) minimum days of statutory annual and sick leave; (ii) paid public holidays; (iii) statutory protection against wrongful dismissal; (iv) provision of key employment terms in writing; and (v) statutory maternity leave and childcare leave benefits. In addition, certain statutory protections relating to overtime and hours of work are prescribed under the Singapore EA, but only apply to limited categories of employees, such as an employee (other than a workman or a person employed in a managerial or an executive position) who receives a salary of up to S$2,600 a month. Other employment-related benefits which are prescribed by law include (i) contributions to be made by an employer to the Central

 

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Provident Fund, under the Central Provident Fund Act (Chapter 36) in respect of each employee who is a citizen or permanent resident of Singapore; (ii) the provision of statutory maternity, paternity, childcare and adoption leave benefits (in each case subject to the fulfilment of certain eligibility criteria) under the Child Development Co-savings Act (Chapter 38A); (iii) statutory protections against dismissal on the grounds of age, and statutory requirements to offer re-employment to an employee who attains the prescribed minimum retirement age, under the Retirement and Re-employment Act (Chapter 274A); and (iv) statutory requirements relating to work injury compensation, and workplace safety and health, under the Work Injury Compensation Act (Chapter 354) and the Workplace Safety and Health Act (Chapter 354A), respectively.

There is no minimum statutorily prescribed wage in Singapore. Singapore employment law also does not prescribe any mandatory annual wage supplement, bonus payments or severance payments to be provided by an employer to its employees. Any such payment to be made to an employee (including as to frequency and amount) is at the discretion of the employer. An employer and its employee are generally free to agree on a notice period for termination of employment. If the employment contract does not provide for a notice period, the employer must adhere to the minimum notice periods stipulated in the Singapore EA. The Singapore EA confers a statutory right on either party to terminate the employment relationship immediately without waiting for the expiry of the notice period by paying salary in lieu of notice.

Philippines

Under Philippine law, any person intending to conduct business within a local government unit’s administrative jurisdiction is required to secure a business permit issued by the local chief executive of such local government unit. The conduct of business operations without the required business permit may result in the payment of fines that may vary depending on the amounts prescribed in the tax ordinance of the relevant local government unit, and closure of the business. In the case of any violation of the ordinances of the relevant local government unit, as well as other applicable Philippine law, the local government unit may impose fines, and in certain cases, revoke or cancel a business permit. If a business permit is revoked or cancelled, the local government unit shall also order the closure of the business.

Certain companies may avail of certain incentives under Philippine law, subject to compliance with applicable rules and regulations of PEZA. PEZA is a government corporation that operates, administers and manages designated special economic zones, or Ecozones, around the Philippines. An Ecozone may contain any or all of the following: industrial estates, export processing zones, free trade zones, and tourist or recreational centers. PEZA-registered enterprises within an Ecozone are entitled to fiscal and non-fiscal incentives such as, but not limited to, income tax holidays. The enjoyment by PEZA-registered enterprises of certain fiscal and non-fiscal incentives is subject to the terms and conditions of their respective registration agreements with PEZA and continuing compliance with the PEZA rules and regulations and related laws.

Transfers of assets of the PEZA-registered enterprises used in relation to its PEZA-registered business require the consent or approval of PEZA. In addition, the transfer/sale of all or substantially all of the assets of the corporation shall be subject to the requirements of Act No. 3952, as amended, otherwise known as the “Bulk Sales Law” and the Revised Corporation Code of the Philippines.

In respect of declaration and payment of dividends, the board of directors of a Philippine corporation may only declare dividends out of unrestricted retained earnings. The issuance of stock dividends requires the ratification of at least two-thirds (2/3) of the outstanding capital stock of the corporation.

The Data Privacy Act of 2012 of the Philippines, or the Philippine Data Privacy Act, is a comprehensive and strict privacy legislation aimed to protect the fundamental human right to privacy of data subjects by: (a) protecting the privacy of individuals while ensuring free flow of information; (b) regulating the collection, recording, organization, storage, updating or modification, retrieval, consultation, use, consolidation, blocking, erasure or destruction of personal data; and (c) ensuring that the Philippines complies with international

 

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standards set for data protection through National Privacy Commission, or the NPC. The Philippine Data Privacy Act mandates companies to inform the individuals about how their personal information is collected and processed. It also ensures that all personal information must be (a) collected and processed with lawful basis, which includes consent, and only for reasons that are specified, legitimate, and reasonable; (b) handled properly, ensuring its accuracy and retention only for as long as reasonably needed; and (c) discarded properly to avoid access by unauthorized third parties. Under the Philippine Data Privacy Act and its implementing rules, all Philippine companies shall comply with the following: (a) appoint a data protection officer; (b) conduct a privacy impact assessment; (c) adopt a privacy management program and privacy policy; (d) implement privacy and data protection measures; and (e) establish a breach reporting procedure. In addition, companies with at least 250 employees or access to sensitive personal information of at least 1,000 individuals are required to register their data processing systems with the NPC. Non-compliance with applicable provisions of the Philippine Data Privacy Act may, upon notice and hearing, be subject to compliance and enforcement orders, cease and desist orders, temporary or permanent bans on the processing of personal data, or payment of fines. In the case of non-compliant corporations, the penalty of fine and/or imprisonment shall be imposed upon the responsible officers (e.g., data protection officer, compliance officer), as the case may be, who participated in, or by their gross negligence, allowed the commission of the crime and/or security breach.

With respect to labor and employment, the Department of Labor and Employment, or DOLE, is the Philippine government agency which has exclusive authority in the administration and enforcement of labor and employment laws such as the Labor Code of the Philippines and the Occupational Safety and Health Standards and such other laws as specifically assigned to it or to the Secretary of the DOLE.

Republic Act No. 6727, otherwise known as the Wage Rationalization Act of the Philippines, or RA 6727, mandates the fixing of minimum wages applicable to different industrial sectors including retail and service establishments. Pursuant to RA 6727, the relevant Regional Tripartite Wages and Productivity Board issues wage orders which prescribe the daily minimum wage rates per industry per locality within the region and in some instances depending on the number of workers and the capitalization of enterprises. The wage increases prescribed under the wage orders generally apply to all private sector workers and employees receiving the daily minimum wage rates or those receiving up to a certain daily wage ceiling, where applicable, regardless of their position, designation, or status of employment, and irrespective of the method by which their wages are paid.

Under the Labor Code of the Philippines, employees may be retired upon reaching the retirement age established in the employment contract or applicable collective bargaining agreement, if any. In the absence of any agreement providing for retirement benefits of employees, an employee, who has served at least five years in an establishment which employs more than 10 employees, may retire upon reaching the age of 60 years or more but not beyond 65, which is the compulsory retirement age. The minimum retirement pay shall be equivalent to one-half month salary for every year of service, a fraction of at least six months being considered as one whole year. The retirement benefits mandated by the Labor Code of the Philippines are separate and distinct from those granted by the Social Security System, or SSS.

An employer or any person who uses the services of another person in business, trade, industry or any undertaking is required under Republic Act No. 11199, the Social Security Act of 2018, to ensure coverage of employees following procedures set out by the law and the SSS. Under the said law, an employer must deduct from its employees their monthly contributions in an amount corresponding to his salary, wage, compensation or earnings during the month in accordance with the monthly salary credits, the schedule and the rate of contributions as may be determined and fixed by the Social Security Commission, pay its share of contribution and remit these to the SSS within a period set by law and/ or SSS regulations.

Employers are likewise required to ensure enrollment of its employees in a National Health Insurance Program administered by the Philippine Health Insurance Corporation a government corporation attached to the Department of Health tasked with ensuring sustainable, affordable and progressive social health insurance pursuant to the provisions of Republic Act No. 10606, the National Health Insurance Act of 2013. On

 

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February 20, 2019, Republic Act No. 11223, the Universal Health Care Act, was enacted, which amended certain provisions of the National Health Insurance Act of 2013. Under the said law, all Filipino citizens are now automatically enrolled into the National Health Program. However, membership is classified into two types, direct contributors and indirect contributors. Direct contributors refer to those who have the capacity to pay premiums, are gainfully employed and are bound by an employer-employee relationship, or are self-earning, professional practitioners, migrant workers, including their qualified dependents, and lifetime members. On the other hand, indirect contributors refer to all others not included as direct contributors, as well as their qualified dependents, whose premium shall be subsidized by the national government including those who are subsidized as a result of special laws. Every member is also granted immediate eligibility for health benefit package under the program.

Under Republic Act No. 9679, the Home Development Mutual Fund Law of 2009, all employees who are covered by the SSS must also be registered with and covered by the Home Development Mutual Fund, more commonly referred to as the Pag-IBIG Fund.

Malaysia

In general, there is a requirement to obtain business premise licenses from the relevant local councils and authorities in accordance with the Local Government Act 1976 and the relevant by-laws and regulations for operating business premises in Malaysia. Most local or district councils have Licensing of Trades, Businesses and Industries By-Laws which stipulate, among others, that no person shall carry on any trade, business or industry in any place or premise within the respective district council unless he is licensed. Each set of by-laws applies within the boundaries of each local or district council. It is an offence for any person to use any premise for operating any business premise without a business premise license, which on conviction, is punishable with a fine not exceeding RM2,000 or to imprisonment for a term not exceeding one year or both and in the case of a continuing offence, to a fine not exceeding RM200 for each day during which the offence is continued after conviction.

Under the Personal Data Protection Act 2010 of Malaysia, or the Malaysian PDPA, organizations are required to (i) obtain consent from the individuals prior to collecting, using or disclosing their personal data unless the limited exceptions under the Malaysian PDPA arises; (ii) inform individuals in writing in two languages (i.e. English and the national language) of, amongst other things, the purposes for which their personal data will be processed and the third parties to whom their personal data will be disclosed; and (iii) ensure that the personal data collected will be processed in a safe and secure manner in accordance with the security standards prescribed under the Personal Data Protection Standard 2015.

An organization that fails to comply with the provisions under the Malaysian PDPA may, if found guilty, be liable to a financial penalty up to a maximum of RM500,000 and any person who, at the time of the commission of the offence, was a director, chief executive officer, chief operating officer, manager, secretary or any person in a managerial capacity may also be jointly or severally liable with the organization and be subject to imprisonment of up to a maximum of five years.

With respect to employee considerations, companies in Malaysia are also subject to the requirements under the Employees Provident Fund Act 1991, or the EPF Act, the Employees Social Security Act 1969, or the ESS Act, and the Employment Insurance System Act 2017, or the EIS. The EPF Act imposes statutory obligation on employers and employees to make contribution to the employees’ provident fund, or the EPF, which is a pension fund that is mandatory (with a few exceptions) for all Malaysian employees. The EPF is a saving scheme for retirement purposes of an employee.

The ESS Act provides for social security for employment injury contingencies in favor of employees and is administered by the Social Security Organization. It provides the right to claim benefits such as invalidity pension, disablement benefit, dependent’s benefit, funeral benefit and survivors’ pension. With effect from

 

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June 1, 2016, employers are required to make monthly deductions and contributions for all employees depending on their ages but regardless of their monthly wages, and generally calculated based on their monthly wages.

The EIS is an act administered by the Social Security Organization to provide certain benefits and a re-employment program for insured persons in the event of loss of employment. The EIS will provide temporary financial aid for up to six months for retrenched employees until they find new employment. Under the EIS, every employee and employer is required to pay mandatory monthly contributions to the Social Security Organization in accordance with the prescribed rates.

In Malaysia, the Employment (Restriction) Act 1968 provides that a non-citizen shall not be employed in any business in Malaysia without a valid employment permit. A foreign employee is required to obtain a work permit such as employment pass or professional visit pass issued by the Department of Immigration, Malaysia in order to carry out employment in Malaysia.

Thailand

The Foreign Business Act B.E. 2542 (A.D. 1999), or the FBA, is the primary law regulating foreign participation or ownership of business operations in Thailand. Unless otherwise permitted by other applicable laws (e.g. Investment Promotion Act B.E. 2520 (A.D. 1977) (as amended), other bilateral treaties and etc.), foreign business operations in Thailand will generally be subject to the FBA and a “Non-Thai” person (as defined in the FBA) cannot conduct certain restricted businesses in Thailand, unless a foreign business license is obtained.

Under the FBA, a “Non-Thai” is defined as:

 

(i)

a natural person not holding Thai nationality;

 

(ii)

a juristic person not registered in Thailand;

 

(iii)

a juristic person registered in Thailand and having the following characteristics:

 

  (a)

a juristic person at least one-half (50%) of whose share capital is held by persons under paragraph (i) or (ii), or a juristic person at least one-half (50%) of whose total capital is invested by persons under paragraph (i) or (ii); or

 

  (b)

a limited partnership or a registered ordinary partnership whose managing partner or manager is a person under paragraph (i); or

 

(iv)

a juristic person registered in Thailand at least one-half (50%) of whose share capital is held by persons under paragraph (i), (ii) or (iii), or a juristic person at least one-half (50%) of whose total amount of capital is invested by persons under paragraph (i), (ii) or (iii).

In addition, any investment by the Thai partners must be genuine and can be proved to the satisfaction of Thai courts that the Thai partners do not hold shares for or on behalf of the Non-Thai person in breach of applicable foreign shareholding limit. The Civil and Commercial Code of Thailand (as amended) requires a private company to have a minimum number of three shareholders. Failure to comply with such minimum shareholder requirement may be grounds for a Thai court to order dissolution of the company.

The Life Insurance Act B.E. 2535 (A.D. 1992) (as amended) and the Non-Life Insurance Act B.E. 2535 (A.D. 1992) (as amended) and relevant rules and regulations issued thereunder by the Office of Insurance Commission of Thailand regulate, amongst other, an operation of insurance brokerage business in Thailand, whereby any person wishing to engage in insurance brokerage business must obtain a requisite license before commencing such businesses.

The Commercial Registration Act B.E. 2499 (A.D. 1956) (as amended) and relevant rules and regulations issued thereunder by the Ministry of Commerce of Thailand require operators of certain prescribed businesses,

 

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including trading of products or services by electronics via internet system, to register themselves with the relevant Commercial Registration Office. Likewise, the Personal Data Protection Act B.E. 2562 (A.D. 2019), or the Thai PDPA, which will come into full effect on June 1, 2022 (as deferred by the Royal Decree on Entities and Businesses of Data Controllers that are Exempted from the Personal Data Protection Act B.E. 2562 (A.D. 2019) (No.2) B.E. 2564 (A.D. 2021)), regulates the collection, storage, usage, disclosure and transfer of personal data of individuals in Thailand. In brief, the Thai PDPA requires data controllers and data processors to comply with the requirements prescribed thereunder, including, amongst others, consent requirements, lawful grounds, privacy notice, disclosure and transfer restrictions, and rights of data subjects.

We are also the recipient of certain investment incentives provided by the BOI. The Investment Promotion Act B.E. 2520 (A.D. 1977) (as amended) empowers the BOI to grant investment incentives to qualified business activities in Thailand. In particular, the BOI incentives primarily include (i) tax incentives (e.g. exemption or reduction of corporate income tax and import duties for machinery and raw materials); and (ii) non-tax incentives (e.g. permission to own land, remittance of foreign currency and bringing skilled workers into Thailand). In this connection, the BOI incentives are granted according to the type of qualified business activities (i.e. Activity-based incentives), whereby additional incentives may be granted for businesses which stimulate competitiveness enhancement, decentralization and industrial area development (i.e. Merit-based incentives). See “Risk Factors—Risks Related to our Business and Industry—We may fail to attract and retain enough highly trained employees to support our operations.”

The principal laws governing labor matters in Thailand are the Civil and Commercial Code (as amended) on contracts relating to the hire of services, the Labor Protection Act B.E. 2541 (A.D. 1998) (as amended), the Labor Relations Act B.E 2518 (A.D. 1975) (as amended), the Social Security Act B.E. 2533 (A.D. 1990) (as amended) and the Workmen’s Compensation Act B.E. 2537 (A.D. 1994) (as amended), which regulate work hours, holidays, leaves, wages, overtime, work rules and regulations, severance pay, welfare, and other similar matters. In the case of a termination of employment, the employer is obligated to provide prior notice to any employees being terminated not less than one wage payment period in advance or pay wages to such employees in lieu of the advance notice, which must be paid on the termination date. Likewise, an employer is generally required to make payment of severance pay to employees if their employment is terminated through no fault of their own in an amount ranging from 30 to 400 days’ worth of their remuneration, depending on an individual employee’s period of employment.

China

Agorae Beijing, our wholly owned subsidiary incorporated in the PRC, provides consulting services to Beijing Rongma Tiancheng Information Technology Co. Ltd., or RMTC, a third party domestically owned PRC company with relevant PRC call center licenses, to support RMTC’s provision of call center services to customers in China. Agorae Beijing’s arrangements with RMTC include a revenue sharing agreement, pursuant to which substantially all of the proceeds from operations of RMTC are received by Agorae Beijing.

Under the PRC Foreign Investment Law, businesses operating in industries on the “negative list” are subject to restrictions on foreign ownership. Call center services are a sub-segment of the value-added telecommunications sector, which was included on the negative list until July 2019 (pursuant to the Special Management Measures for the Market Entry of Foreign Investment (Negative List) (2019 Version)). The PRC Telecommunication Regulation and the Measures on Administration of Licensing for Telecommunication Operation requires that a call center operator in the value-added telecommunications industry obtain a VATS License. As a result, prior to July 2019, a foreign owned entity, such as Agorae Beijing, could provide call center services in the PRC only through a joint venture with a PRC partner and the foreign entity was able to hold no more than 50% of the equity in the joint venture. Although the restriction on foreign shareholding in call center services businesses has now been lifted, the national implementation of rules on how a foreign owned entity can apply for the VATS License have not been promulgated, and it is unclear whether or when the national implementation rules will be enacted. See “Risk Factors—Risks Related to Countries Where We Operate—If the PRC government deems that

 

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Agorae Beijing’s contractual arrangements do not comply with PRC regulatory restrictions on foreign investment or VATS License requirements, we could be subject to adverse consequences.”

The Cybersecurity Law of the People’s Republic of China, or the PRC Cybersecurity Law, which came into effect as of June 1, 2017 and the relevant regulations require that network operators, which includes, among others, call center services providers, take technical measures and other necessary measures to safeguard the safe and stable operation of the networks, effectively respond to network security incidents, prevent illegal and criminal activities, and maintain the integrity, confidentiality and availability of data. The PRC Cybersecurity Law also reaffirms the principles and requirements on personal information protection and strengthens the obligations of network operators in the process of collecting, using, disclosing, storing and transferring personal information. Network operators who do not comply with the PRC Cybersecurity Law may be subject to fines, suspension of operation, shutdown of websites, revocation of business license, and, in severe cases, criminal liabilities.

The PRC PIPL, which was promulgated on August 20, 2021 and will take effect on November 1, 2021, imposes restrictions on entities and individuals that collect and process personal data and sensitive information on subjects in China (such entities or individuals, “personal data processors”). The PRC PIPL generally requires personal data processors to notify and obtain consents prior to collection, storage, use, processing, transmission, provision, disclosure, or deletion of personal information (being all kinds of information related to identified or identifiable individuals) and to provide individuals with the right to withdraw their consent and to access, copy and correct their own personal information. The PRC PIPL also imposes various baseline obligations on personal data processors in connection with permitted uses of, accountability for, the protection of, the retention of, and overseas transfers of, personal data. The PRC PIPL includes a requirement for personal data processors to transfer personal data of an individual to a different organization when requested by the individual (generally referred to as “data portability”).

Personal data processors have mandatory obligations to assess data breaches they suffer, and to notify the CAC, and the CAC has the right to order the personal data processor to notify the relevant individuals where the data breach is of a certain severity. The PRC PIPL creates various offenses in connection with failure to comply with the requirements under the PRC PIPL. These offenses may be applicable to personal data processors, their officers and/or their employees. Offenders are liable on conviction to fines of up to RMB50 million, or 5% of last year’s annual revenue, and/or suspension of operation. The PRC PIPL empowers the CAC with significant regulatory powers to ensure compliance with the PRC PIPL, including powers to investigate, give directions and impose penalties. In addition, the PRC PIPL created a right of private action, pursuant to which the Chinese courts may grant damages to persons who suffer loss or damages as a result of actions of a personal data processer, unless the personal data processor can prove it is not at fault.

In addition, on July 10, 2021, the CAC published a draft amendment to the Cybersecurity Review Measures (the “Draft Amendment”) for public comments. Pursuant to the Draft Amendment, if any critical information infrastructure operator possesses personal information of more than one million Chinese users, it needs to file with the CAC for a cybersecurity review prior to the listing of its securities on any foreign stock exchange. When the Draft Amendment will be enacted, whether this requirement will be maintained in the final effective version, and to what extent, if at all, this requirement applies to us, is unclear. However, if the cybersecurity review requirement will apply to us, we cannot guarantee we will be able to obtain the approval or if there will be any other impact on our operation.

The Provisions on Protection of Personal Information of Telecommunication and Internet Users, or the PRC TIUPIP Provisions, which came into effect as of September 1, 2013, particularly focuses on the protection of personal information of end-users of telecommunications services and internet information services. The PRC TIUPIP Provisions requires telecommunication service operators, which includes, among others, call center services providers, to adhere to the principles of legality, appropriateness and necessity, when collecting and using end-user’s personal information in the process of providing services. The PRC TIUPIP Provisions also includes detailed procedural requirements that service providers must follow to collect and use end-user’s

 

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personal information and measures that service providers should take to prevent the leakage, destruction, tampering or loss of end-user’s personal information. Service providers who do not abide by the PRC TIUPIP Provisions may be subject to warnings, fines and, in severe cases, criminal liabilities.

Pursuant to the Labor Law of the People’s Republic of China, or the PRC Labor Law, promulgated on July 5, 1994, and amended on August 27, 2009 and December 29, 2018, the PRC Labor Contract Law of the People’s Republic of China, or the PRC Labor Contract Law, promulgated on June 29, 2007, and amended on December 28, 2012 and the relevant regulations on labor protection in the PRC, labor relationships between employers and employees must be specified in written form and employers must pay wages to employees in amounts not lower than local minimum wages standards. An employer may legally terminate a labor contract and dismiss its employees after reaching agreement upon negotiations with the employee or, where applicable, by fulfilling statutory conditions. However, the PRC Labor Contract Law requires the payment of statutory severance pay upon the termination of an employment contract in most cases. With respect to employee benefits, employers are required to register with the relevant social insurance authorities and provide their employees with welfare schemes covering pension, unemployment insurance, maternity insurance, work-related injury insurance and medical insurance. Employers are also required to register with the relevant administrative centers for housing fund and deposit housing funds for their employees. Employers shall make all social insurance contributions and housing fund contributions on a monthly basis. Except for mandatory exceptions such as force majeure, social insurance premiums and housing provident fund may not be paid late, reduced or be exempted.

 

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MANAGEMENT

Directors and Executive Officers

The following table sets forth the names, ages, and positions of our directors and executive officers as of the date of this prospectus. The current business address of each of our directors and executive officers is 750D Chai Chee Road, #06-01/06 ESR BizPark @ Chai Chee, Singapore 469004.

 

Directors and Executive Officers

  Age    

Position/Title

Directors:

   
Mr. Laurent Junique     55     Executive Chairman and Chief Executive Officer (CEO)
Mr. Tze Neng Chin     54    

Chief Financial Officer (CFO) and Director

Mr. Edward Goh     45     EVP Corporate Development and Director
Mr. Chia Ling Koh     50     Independent Director Nominee
Ms. Yee Peng Tan     47     Independent Director Nominee
Executive Officers(1):    
Mr. Tony Bruno     59     EVP North Asia & Business Strategy
Ms. Sophie Chelmick     46     SVP Spain & Romania
Mr. Andy Cranshaw     60    

SVP Learning & Development

Mr. Byron Fernandez     44     EVP Malaysia & India & Group Chief Information Officer (CIO)
Mr. Chee Gay Lim     51     EVP Group Chief Human Resources Officer (CHRO)
Mr. Michael Pan     40     SVP Digital Innovation
Ms. Angie Tay     45     EVP Singapore & Thailand & Group Chief Operating Officer (COO)
Mr. Ricart Valvekens     41     EVP Philippines & the Americas

 

Note:

(1)

Other than directors who are also executive officers.

A description of the business experience and present position of each director and executive officer is provided below:

Directors

Laurent Junique founded the business that developed into the Company in Singapore in 1995 and is one of the pioneers in the industry in Asia with over 25 years of outsourcing experience. He ensures that the Company delivers innovative solutions that have a profound impact on clients’ businesses. Mr. Junique leveraged his unified vision to grow our Company into one of the global leading outsourced business services providers and trusted customer experience partner to some of the world’s most valuable brands. Mr. Junique emerged as one of the leading voices in the global business process outsourcing industry when he received the 2018 Ernst & Young Entrepreneur of the Year—Outsourced Solutions Award. Prior to founding our Company, Mr. Junique worked as a managing director at Phone Communication Pte Ltd. Mr. Junique has a bachelor’s degree in marketing from E.S.A.E/E.S.I.A.E Paris.

Tze Neng Chin has served as our Chief Financial Officer (formerly referred to as “Group Finance Director”) since May 2005 and as a director since April 2021. He is responsible for operational areas of accounting and finance, treasury, taxation, general insurance matters of the Company. His work also includes managing the budgeting and forecasting of our Company’s financial performance for the board of directors and shareholders’ iteration. Mr. Chin’s initial accounting career was with Kuala Lumpur’s office of Coopers and Lybrand (now a part of PricewaterhouseCoopers) where his role was largely to serve clients for statutory audit compliance and special audit assignments. He has also worked in finance roles at Malayan Cement Berhad, which later became part of the French-based Lafarge SA. Immediately prior to joining our Company, Mr. Chin worked at a

 

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German-owned decorative paper maker and supplier, Interprint, as a Financial Controller for approximately two years. Mr. Chin has an Australian degree holder from RMIT University, Melbourne as well as various professional qualifications such as a designated Chartered Accountant as re-designated by Malaysian Institute of Accountants (MIA) on June 28, 2001 and a Certified Practicing Accountant by the Australian Society of Certified Practicing Accountants on November 30, 1994.

Edward Goh has served as our EVP Corporate Development since 2017 and as a director since April 2021. He is responsible for strategic decisions to grow and restructure our businesses as well as establish strategic partnerships, and achieve optimal value creation for the organization. Prior to joining us in 2017, he worked for Bank Julius Baer as Managing Director Senior Advisor in the investment finance team. He has 15 years of experience in corporate finance, strategy research and credit. Since joining our Company in 2017, Mr. Goh has worked closely with the CEO and other executive officers to enhance ownership structure, create access to funding options, and support expansion plans into new markets. Edward earned his Bachelor of Business degree from Nanyang Technological University in 2000 and his Master of Business Administration degree from Imperial College, London in 2003. He is also a Chartered Financial Analyst.

Chia Ling Koh will serve as an independent non-executive director on our board of directors starting from the SEC’s declaration of effectiveness of our registration statement on Form F-1 of which this prospectus is a part. He also serves in the position of Managing Director for the Singapore law practice OC Queen Street LLC, a member firm of Osborne Clark and previously was a partner at Bird & Bird from 2006 to July 2016. Mr. Koh earned his Bachelor of Laws degree from the University of London in 1996 and Master of Laws in Media, Communication and Information Technology from the University of New South Wales in 2000. Mr. Koh also has a Master of Technology in Knowledge Engineering degree from the National University of Singapore, which he earned in 2004.

Yee Peng Tan will serve as an independent non-executive director on our board of directors starting from the SEC’s declaration of effectiveness of our registration statement on Form F-1 of which this prospectus is a part. She also serves as a director on the board of directors of Vanguard Health Fund Limited, 1FSS Pte Ltd and Hercules Pte Ltd. Ms. Tan also previously worked at KPMG LLP as a partner where she led the healthcare and biomedical sciences practice and managed an audit portfolio of numerous entities listed on the Singapore Exchange Securities Trading Limited (SGX-ST). Ms. Tan also served as an adjunct associate professor at Nanyang Technological University (Nanyang Business School) from 2009 to 2018. Ms. Tan earned her Bachelor of Accountancy degree from Nanyang Technological University in 1995.

Executive Officers

Laurent Junique has served as our CEO since 1995. For further information, see “—Directors.”

Tony Bruno has served as EVP North Asia & Business Strategy since October 2017. He is responsible for all business operations, business development and growth in China and Japan. Prior to joining us, he was the Head of International Operations at 24/7 Intouch, overseeing all non-Americas operations, business and development opportunities. Prior to that he led PCCW Teleservices as their Executive Director overseeing PCCW Teleservices businesses in all locations. He previously held various roles in general management, sales, marketing and operations. Mr. Bruno obtained his degree from the University of Manchester in Math and Physics in 1983.

Sophie Chelmick has served as our SVP Spain since October 2018. She is responsible for launching the TDCX business in Spain and Romania. She has over 15 years of experience in managing Pan-European customer operations that positively impact business results for clients. She achieves this by building great relationships with her clients at all levels while in parallel building and supporting talented operational teams who consistently produce ambitious sales, productivity and quality results. Prior to joining us in 2018, she worked for CPM International, part of the Omnicom Group as their Business Unit Director for Key European Accounts. She earned her degree from University of London in 1997 and her post-graduate degree from University of Aberdeen in 2000. She is also a COPC certified practitioner.

 

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Tze Neng Chin has served as our Chief Financial Officer (formerly referred to as “Group Finance Director”) since May 2005. For further information, see “—Directors.”

Andy Cranshaw joined our Company as SVP Learning & Development in July 2019. He is responsible for overseeing the next phase in the development of our Company’s training practice as we create a Global Learning and Development culture that will differentiate our Company both as an employer and as a partner for our clients. Andy is a well-respected educator in customer experience and contact center management and before joining our Company was Director Southeast Asia for COPC Inc. He has over 25 years of experience in business process outsourcing management roles and CX consulting, over 20 of which have been spent in Southeast Asia and has personally delivered hundreds of training programs for Contact Center staff and managers throughout the Asia Pacific region as well as in the United Kingdom and the United States. Mr. Cranshaw is a founding member of the Contact Center Association of Malaysia from whom he is the recipient of a career achievement award for his service to the Malaysian contact center industry.

Byron J. Fernandez has served as our EVP Malaysia since September 2014 and our Chief Information Officer since January 2019. Additionally, in March 1, 2020, Mr. Fernandez assumed responsibility as EVP for India. In 2019, his role was expanded to serve as our Chief Information Officer and he is now responsible for information technology deployments globally. Prior to joining us in 2014, he worked for SRG Asia Pacific Sdn. Bhd. as their General Manager and for Vision IP Services (now known as Redberry) as their Head of Operations. Byron earned his MBA degree from Olympia College in 2002 and his Advanced Diploma in Computer Science from Informatics Institute in 1998. Byron is also a CIAC Certified Strategic Leader and a COPC Certified Implementation Leader. Byron has over 20 years of experience in the outsourcing industry.

Chee Gay Lim joined our Company in 2017 as Chief Human Resources Officer for Malaysia before promoted to Group Chief Human Resources Officer in March 2021. Chee Gay has more than 20 years of experience in human resources, manufacturing, information technology, and supply chain management. He has held management and board positions at country and regional levels and managed teams in the US, Europe, and Asia. He has a specific expertise in group-level human resources transformation, employer branding, digitalization of human resources processes, leadership development, building diversity and inclusion culture and operational excellence for sustainable growth. Chee Gay has been named the Top 101 Fabulous Global Tech Human Resources Leaders by the CHRO (Chief Human Resource Officers) Board in 2020, Top 100 Human Resources Leaders with CSR Initiatives by the World HRD Congress in 2019, National Human Resources Leader of the Year by the Malaysia Institute Human Resources Management in 2018 and Human Resources Professional of the Year by the World Congress HRD in 2017. He is also certified in Six Sigma Black Belt, Lean, Design Thinking, COPC, and Associate, Life Management InstituteTM. He graduated from University Science Malaysia with Bachelor of Applied Science (Hons) in 1994. He is Malaysia Lifesaving Sports Coach and Malaysia l Lifesaving Society Chief Examiner while actively involved in water drowning prevention CSR activities across the country.

Edward Goh has served as our EVP Corporate Development since 2017. For further information, see “—Directors.”

Michael Pan joined our Company in 2014 as the Regional Digital Marketing Manager. In March 2020, he was promoted to SVP for Digital Innovation, where he oversees TDCX’s broad marketing initiatives including branding, digital marketing, digital innovation, and exponential technologies such as artificial intelligence, augmented and virtual reality, machine learning, finance technology, and internet of things. Michael sits on several international judging panels for prominent digital awards and is a member of the Interactive Media Council, Web Marketing Association, Academy of the Interactive & Visual Arts and The One Club for Creativity. Michael also was formerly employed as the head of one of the largest digital agencies in Malaysia. He was also one of the first in Asia to be inducted into Google’s #CertifiedChamps Hall of Fame for completing all Google Ads certifications. Michael graduated with a Bachelor of Arts (Hons) in Creative Multimedia from Limkokwing University of Creative Technology in 2007.

 

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Angie Tay has been with our Company since 2004. Ms. Tay has served as our EVP Singapore & Thailand since October 2018 and was appointed to the position of Chief Operating Officer of the Company on January 12, 2021. She is responsible for leading over 2000 staff in both countries. She has more than 20 years of business process outsourcing experience from designing customer access strategies, inbound customer contact, outbound outreach and all supporting functions of a high performing contact center. Prior to joining us in 2004, she worked for MobileOne Pte Limited as their Customer Service Executive and for Standard Chartered Bank as their Customer Service Manager. Angie earned her Bachelor of Business degree from Nanyang Technological University in 1997 and her Executive MBA from Nanyang Technological University in 2014. Ms. Tay is a certified COPC Coordinator, as well as a certified Six Sigma Green Belt from Singapore Quality Institute. She is also the Vice Chairman of the Contact Center Association of Singapore and a member in the Total Defence Awards Evaluation Board (2017 to 2020). Ms. Tay is also a member of Republic Polytechnic School of Hospitality School Advisory Committee (2018 to 2020).

Ricart Valvekens has served as our EVP Philippines since 2015 and, additionally, assumed responsibility as EVP for the Americas in February 1, 2020. He is responsible for overall operations in the Philippines. Prior to joining us, he worked for Nestle as their Regional Customer Service Manager covering the whole of Asia. Ricart earned his Master’s degree in European Marketing and Management from IDRAC Business School in 2002 and also attended an Executive Program in Strategy and Organization at Stanford University in 2019. Ricart has 15 years of customer experience and outsourcing industry experience.

Board of Directors

Upon the SEC’s declaration of effectiveness of our registration statement on Form F-1, of which this prospectus forms a part, our board of directors will consist of five directors, of whom two will be independent. Our board of directors has determined that none of our independent directors has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of director and that each of these directors is “independent” as that term is defined under the rules of NYSE. There are no family relationships among any of our directors or executive officers.

Our directors do not have fixed terms of office. Directors can be appointed and removed or replaced by an ordinary resolution of the shareholders. In addition, directors may be appointed either to fill a vacancy arising from the resignation of a former director or as an addition to the existing board of directors by the affirmative vote of a simple majority of the directors present and voting at a meeting of the board of directors. A director is not required to hold any shares in our Company to qualify to serve as a director.

Duties of Directors

Under Cayman Islands law, our directors owe fiduciary duties to our Company, including a duty of loyalty, a duty to act honestly, and a duty to act in what they consider good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also have a duty to exercise the skills they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time, and the class rights vested thereunder in the holders of the shares. Our company has the right to seek damages if a duty owed by our directors is breached. In certain limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached.

Board Committees

Our board of directors has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. As a foreign private issuer, we are permitted to follow home country corporate governance practices under the Corporate Governance Rules of the New York Stock Exchange.

 

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Following this offering, we will rely on home country practice to be exempted from certain of the corporate governance requirements of the NYSE, such that a majority of the directors on our board of directors are not required to be independent directors, our audit committee is not required to have a minimum of three members, and neither our compensation committee nor our nominating and corporate governance committee is required to be comprised entirely of independent directors.

Audit Committee

The Audit Committee, which is expected to comprise Ms. Yee Peng Tan and Mr. Chia Ling Koh, will assist our board of directors in overseeing our accounting and financial reporting processes and the audits of our financial statements. Ms. Yee Peng Tan will serve as chairman of the Audit Committee. Our board of directors has determined that each member of the Audit Committee satisfies the independence requirements of Section 303A of the Corporate Governance Rules of the NYSE and the independence requirements of Rule 10A-3 under the Exchange Act. Our board of directors has also determined that Ms. Yee Peng Tan qualifies as an audit committee financial expert within the meaning of the SEC rules.

The Audit Committee’s responsibilities will include:

 

   

recommending the appointment of the independent auditor to the general meeting of shareholders;

 

   

the appointment, compensation, retention and oversight of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit services;

 

   

pre-approving the audit services and non-audit services to be provided by our independent auditor before the auditor is engaged to render such services;

 

   

evaluating the independent auditor’s qualifications, performance and independence, and presenting its conclusions to the full board on at least an annual basis;

 

   

reviewing and discussing with the Board and the independent auditor our annual audited financial statements and quarterly financial statements prior to the filing of the respective annual and quarterly reports;

 

   

reviewing our compliance with laws and regulations, including any initiatives or major litigation or investigations against us that may have a material impact on our financial statements, and assessing our risk management, compliance procedures and hiring of independent auditor employees; and

 

   

approving or ratifying any related person transaction (as defined in our related person transaction policy) in accordance with our related person transaction policy, which is intended to be adopted by our board of directors with effect upon the completion of this offering.

The Audit Committee will meet as often as one or more members of the audit committee deem necessary, but in any event will meet at least four times per year. The Audit Committee will meet at least once per year with our independent accountant, without our executive officers being present.

Compensation Committee

The Compensation Committee, which is expected to comprise Mr. Laurent Junique and Ms. Yee Peng Tan, will assist the board of directors in determining executive officer compensation. Mr. Laurent Junique will serve as chairman of the Compensation Committee. Our board of directors has determined that Ms. Yee Peng Tan satisfies the independence requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange. Under SEC and NYSE rules, there are heightened independence standards for members of the Compensation Committee, including a prohibition against the receipt of any compensation from us other than standard board member fees. Although foreign private issuers are not required to meet this heightened standard, Ms. Yee Peng Tan meets this heightened standard. The Compensation Committee assists the board in reviewing

 

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and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. As a member of the Compensation Committee, our chief executive officer may be present at any committee meeting during which his compensation is deliberated upon.

The Compensation Committee’s responsibilities include:

 

   

identifying, reviewing and proposing policies relevant to executive officer compensation;

 

   

analyzing the possible outcomes of the variable remuneration components and how they may affect the remuneration of the executive officers;

 

   

evaluating each executive officer’s performance in light of such goals and objectives and determining each executive officer’s compensation based on such evaluation;

 

   

determining any long-term incentive component of each executive officer’s compensation in line with the remuneration policy and reviewing our executive officer compensation and benefits policies generally; and

 

   

reviewing and assessing risks arising from our compensation policies and practices.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee, which is expected to comprise Mr. Laurent Junique and Mr. Chia Ling Koh, will assist our board of directors in identifying individuals qualified to become members of our board of directors consistent with criteria established by our board of directors. Mr. Laurent Junique serves as chairman of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee assists our board of directors in identifying individuals qualified to become members of our board of directors and executive officers consistent with criteria established by our board of directors and in developing our corporate governance principles.

The Nominating and Corporate Governance Committee’s responsibilities include:

 

   

identifying individuals qualified to become members of our board of directors and ensuring these individuals have the requisite expertise;

 

   

reviewing and evaluating the composition, function and duties of our board of directors;

 

   

recommending nominees for selection to our board of directors and its corresponding committees;

 

   

making recommendations to the board as to determinations of board member independence;

 

   

leading our board of directors in a self-evaluation, at least annually, to determine whether it and its committees are functioning effectively;

 

   

overseeing and recommending for adoption by the general meeting of shareholders the compensation for our board of directors; and

 

   

developing and recommending to the board our rules governing the board, reviewing and assessing the adequacy of such rules governing the board and recommending any proposed changes to the board.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics, which covers a broad range of matters including the handling of conflicts of interest, compliance issues and other corporate policies and standards, such as gifts and hospitality, protection and use of our assets, intellectual property and confidentiality, accuracy of financial reports and other public communications, record keeping, discrimination and harassment, fair dealing, and health and safety.

 

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Compensation of Directors and Executive Officers

The compensation for each of our executive officers comprises base salary, discretionary bonus, equity compensation, contractual benefits and contributions to defined contribution plans. Total compensation paid and benefits in kind provided to our directors and executive officers for the year ended December 31, 2020 was S$7.9 million.

We have not set aside or accrued any amount to provide pension, retirement or other similar benefits. For a description of share incentive grants to our directors and officers, see “—Performance Share Plan.”

Performance Share Plan

On August 26, 2021, we adopted the TDCX Performance Share Plan, or our PSP, which allows us to offer Class A ordinary shares or ADSs to our employees, officers, executive directors and consultants. Pursuant to the PSP, the aggregate nominal number of shares over which our board of directors may award is 5.0% of our total issued and outstanding shares on a fully diluted as-converted basis, which is 7,113,600 shares immediately following the offering (assuming no exercise by the underwriters of their option to purchase additional ADSs).

Eligibility. We may award Class A ordinary shares or ADSs to our employees, officers, executive directors and consultants provided that such person, on the date of the award, is at least 21 years of age.

Release of Shares. Class A ordinary shares or ADSs awarded under the PSP and in connection with a share award may be released and delivered to a plan participant based on certain performance criteria being satisfied over any performance period as prescribed pursuant to the PSP (and to the extent that such performance criteria has been satisfied) and certain other conditions being met. These conditions include no misconduct by such person prior to the release of any Class A ordinary shares or ADSs pursuant to an award; there has been no winding up of the Company due to insolvency; or termination (subject to customary exceptions). A committee comprising certain members of our board of directors, or the PSP Committee, is responsible for administering the PSP and has the discretion to release or determine any award lapsed in the case of certain conditions, which include, among others, a transfer of beneficial ownership of an award due to a bankruptcy of a plan participant, the death or disability of a participant (and in such case the disability results in the participant no longer being employed by the Company), or any other event approved by such PSP Committee.

Transfer Restrictions. Class A ordinary shares or ADSs awarded to any person are subject to certain limitations on transfer. The Class A ordinary shares or ADSs awarded under the PSP shall not be transferred, charged, assigned, pledged, or otherwise disposed of, in whole or in part, during any retention period determined by the PSP Committee (except to the extent set out in any award letter or as determined by the PSP Committee, in its sole discretion).

Termination of the Scheme. The PSP remains in force at the discretion of the PSP Committee, subject to a maximum period of 10 years from the date of the adoption. The termination of the scheme shall not affect Class A ordinary shares or ADSs that have been awarded in accordance with the plan, whether or not such options have been released.

 

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As of the date of this prospectus, there are no Class A ordinary shares (including ordinary shares represented by ADSs or ADRs) over which awards have been granted to our executive officers and are outstanding under the PSP. Following the closing of the offering, we expect to award, subject to the approval of our board of directors, up to approximately 1,815,000 Class A ordinary shares to certain of our directors, officers and other senior employees. Such awards will be valued at the applicable fair value on the date of such award. We expect that such Class A ordinary shares will be delivered to the applicable recipient according to an annual vesting schedule and subject to the satisfaction of certain performance conditions and other conditions.

In the future, we may expand the PSP to include the award of Class A ordinary shares, ADSs, options or other incentives to include further categories of employees, whether issued out of the ADS approved for distribution under the PSP or through additional Class A ordinary shares or ADS reserved for this purpose.

Employment Agreements and Indemnification Agreements

Other than as disclosed above, none of our directors has entered into service agreements with our Company or any of our subsidiaries that provides for benefits upon termination of employment.

We plan to enter into indemnification agreements with each of our directors and executive officers, to be effective upon the completion of this offering. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our Company.

 

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PRINCIPAL SHAREHOLDER

The following table sets forth information with respect to the beneficial ownership of our ordinary shares, as of the date of this prospectus and as adjusted to reflect the sale of ADSs offered by us in our initial public offering (assuming the underwriters do not exercise their option to purchase additional ADSs), for:

 

   

each of our directors and executive officers; and

 

   

each person known to us to beneficially own 5.0% or more of our Class A ordinary shares or Class B ordinary shares.

The calculations of percentage ownership as of the date of this prospectus are based on 123,500,000 ordinary shares issued and outstanding as of the date of this prospectus, and (i) 18,772,000 Class A ordinary shares and (ii) 123,500,000 Class B ordinary shares issued and outstanding immediately after the completion of this offering. The calculations of percentage ownership after this offering assumes the sale of 18,772,000 Class A ordinary shares (represented by 18,772,000 ADSs) pursuant to this offering, assuming the underwriters do not exercise their option to purchase additional ADSs.

For the purpose of this table, beneficial ownership is determined in accordance with the rules of the SEC. Except as indicated below, the persons named in the table have sole voting and investment power with respect to all ordinary shares shown as beneficially owned by them. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

 

    Ordinary Shares
Beneficially Owned
Prior to Offering
    Class A
Ordinary Shares
Being Offered
and Sold in
This Offering
    Ordinary Shares Beneficially Owned After This
Offering
 
    Number of
Ordinary
Shares
    % of
Total
Ordinary
Shares
    Number     %     Class A
Ordinary
Shares
    Class B
Ordinary
Shares
    % of
Total
Ordinary
Shares
    % of
Aggregate
Voting
Power
 

Directors and Executive Officers:(1)

               

Laurent Junique(2)

    123,500,000       100.0                       123,500,000       86.8%       98.5%  

Mr. Tze Neng Chin

                                               

Mr. Edward Goh

                                               

Mr. Chia Ling Koh

                                               

Ms. Yee Peng Tan

                                               

Mr. Tony Bruno

                                               

Ms. Sophie Chelmick

                                               

Mr. Andy Cranshaw

                                               

Mr. Byron Fernandez

                                               

Mr. Chee Gay Lim

                                               

Mr. Michael Pan

                                               

Ms. Angie Tay

                                               

Mr. Ricart Valvekens

                                               

All of our directors and executive officers as a group

    123,500,000       100.0                       123,500,000       86.8%       98.5%  

Principal:

                           

Transformative Investments Pte Ltd(2)

    123,500,000       100.0                       123,500,000       86.8%       98.5%  

 

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Notes:

(1)

Except as otherwise indicated below, the business address of our directors and executive officers is 750D Chai Chee Road, #06-01/06 ESR BizPark @ Chai Chee, Singapore, Singapore 469004.

(2)

Represents 123,500,000 ordinary shares held by Transformative Investments Pte Ltd, which is a company incorporated in the Cayman Islands. The entire interest of Transformative Investments Pte Ltd is held by a trust that was established for the benefit of Mr. Junique and his family. The registered address of Transformative Investments Pte Ltd is Offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

As of the date of this prospectus, none of our record holders were located in the United States. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company.

 

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RELATED PARTY TRANSACTIONS

The following is a description of related party transactions we have entered into since January 1, 2018.

Credit Suisse Facility

On March 16, 2021, we entered into a term loan credit facility agreement with Credit Suisse AG, as amended by an amendment agreement dated May 21, 2021 and as may be amended from time to time thereby. The credit facility provides for borrowings in an aggregate amount of S$252.0 million (US$188.0 million). Contemporaneous with TDCX’s acquisition of our Founder’s shareholder interests in TDCX KY, we drew upon the credit facility on March 23, 2021. Subsequently, we paid the proceeds of S$252.0 million to our Founder for the purchase of his interests in TDCX KY. As of the date of this prospectus, the outstanding principal balance is S$252.7 million (US$188.0 million). We intend to use proceeds from the offering to fully repay this term loan credit facility, including accrued and unpaid interest and premium (if any), in accordance with the terms of this facility agreement.

All of our obligations under our term loan credit facility agreement are guaranteed by TDCX Holdings and TDCX KY and secured by a mortgage of our Principal Shareholder’s shares in TDCX Inc., TDCX Inc’s shares of TDCX KY and TDCX KY’s shares in TDCX Holdings. Additionally, our Founder is required to maintain an amount equal to 80% of the amount outstanding under the facility deposited in a collateralized bank account with Credit Suisse AG, which shall accrue interest at a rate equal to the rate accrued on borrowings under the facility minus 100 basis points, until, among others, repayment of the facility. We are also required to maintain an interest reserve account and an equity cure account with Credit Suisse AG. Our term loan credit facility agreement contains a number of covenants that, among other things, impose certain restrictions on our ability, subject to certain exceptions, to:

 

   

create or permit any security over our assets or the assets of our subsidiaries;

 

   

be a creditor to any financial indebtedness;

 

   

substantially change the general nature of our business;

 

   

declare, make or pay any dividend or other distribution; and

 

   

issue any shares or grant to any person any conditional or unconditional options, warrant or other right to call or otherwise acquire any of our shares or shares of our subsidiaries except in connection with the initial public offering of shares in our Company.

Our facility agreement contains financial covenants including: (a) maintaining a ratio of EBITDA to finance charges of not less than 6:1 for a trailing 12-month period at the end of each financial year and quarter; and (b) maintaining a ratio of total net debt to EBITDA of not more than 2:1 for a trailing 12-month period at the end of each financial year and quarter. See “Description of Certain Indebtedness—Credit Suisse Facility”.

Shareholder Loan to Teledirect Hong Kong Limited

We own a 10% equity interest in Teledirect Hong Kong Limited, or TDHKL. We have not entered into any shareholders agreement with TDHKL and do not have any contractual veto or consent rights in relation to TDHKL. We also do not have any express contractual right to nominate or appoint any directors to the board or persons to the management of TDHKL, though TDCX HPL is currently a member of the board of directors of TDHKL.

We entered into a shareholder loan agreement dated December 20, 2019 with TDHKL, Michael Thomas Cowell and Milton Kung, or Mr. Cowell and Mr. Kung, together, the TDHKL Individual Shareholders. Pursuant to the shareholder loan agreement, we provided TDHKL with a loan of 6.5 million Hong Kong dollars. Outstanding

 

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principal amounts drawn under the loan accrue interest at the HSBC Best Lending Rate on the last business day of the preceding month of the due date plus a 3% spread per annum from the date of the advance until the date of repayment. Interest is payable on a quarterly basis. In addition to a conversion right with respect to any outstanding amounts, and notwithstanding a buyback option under which the Individual Shareholders have the option to buy back any conversion shares, we also have the right to exercise a call option for an additional 40% interest of TDHKL within three years of our exercise of the conversion right. Any exercise of the buyback option by the Individual Shareholders does not affect our right to exercise our call option under the shareholder loan agreement.

Event of default provisions include if TDHKL (a) fails to pay TDCX HPL any amount due (including principal and interest), (b) becomes subject to proceedings to wind up TDHKL, (c) becomes insolvent or (d) enters into a scheme of arrangement with its creditor(s). Upon the occurrence of a default and upon at least 14 days’ written notice by TDCX HPL to TDHKL and continued default by TDHKL, then TDCX HPL may terminate the shareholders’ loan agreement upon 30 days’ prior written notice of such termination and all outstanding amounts owed under the shareholders’ loan agreement shall become immediately due.

The shareholder loan has been repaid as of December 31, 2020.

Employment Agreements and Indemnification Agreements

For a description of our other agreements with our board members and executive officers, see “Management—Employment Agreements and Indemnification Agreements.”

Registration Rights Agreement

On September 18, 2021, we entered into a registration rights agreement with our Principal Shareholder, which grants certain registration rights with respect to the Class A Ordinary Shares or ADSs owned by our Principal Shareholder and certain of its affiliates, see “Description of Share Capital—Registration Rights Agreement.”

Demand registration rights

Our Principal Shareholder will have the right to demand that we effect a registration covering the offer and sale of its Class A Ordinary Shares or ADSs. Our Principal Shareholder is entitled to six such registrations. We, however, are not required to prepare and file (i) more than two demand registration statements in any 12-month period, or (ii) any demand registration statement within 120 days following the date of effectiveness of any other registration statement. If the demand registration relates to an underwritten public offering and the managing underwriter advises in its reasonable opinion that the number of securities requested to be included in the demand registration exceeds the largest number which reasonably can be sold in such offering without having a material adverse effect on such offering, we will include in such demand registration, up to the maximum offering size, following the order of priority: (i) the registrable securities that the requesting parties propose to register; and (ii) any securities we propose to register and any securities with respect to which any other security holder has requested registration. If the managing underwriter determines that less than all of the registrable securities proposed to be sold can be included in such offering, then the registrable securities that are included in such offering shall be allocated pro rata among the respective requesting parties on the basis of registrable securities sought to be registered by each requesting party.

Shelf registration rights

Once we are eligible to file a shelf registration statement pursuant to Rule 415 promulgated under the Securities Act, our Principal Shareholder will have the right to demand that we file a shelf registration statement covering its Class A Ordinary Shares or ADSs. We, however, will not be required to prepare and file more than two shelf registration statements in any 12-month period.

 

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Piggyback registration rights

If we propose to file a registration statement for an offering of our securities, other than in a transaction of the type referred to in Rule 145 under the Securities Act or to our employees pursuant to any employee benefit plan, then we must offer our Principal Shareholder an opportunity to include in the registration all or any part of its registrable securities. If the piggyback registration relates to an underwritten public offering and the managing underwriter advises in its reasonable opinion that the number of securities requested to be included in the piggyback registration together with the securities being registered by us or any other security holder exceeds the largest number which reasonably can be sold in such offering without having a material adverse effect on such offering, then (i) if we initiate the piggyback registration, we will include in such registration the securities we propose to register first, and allocate the remaining part of the maximum offering size to all other selling security holders on a pro rata basis; (ii) if any holder of our securities initiated the piggyback registration, we will include, up to the maximum offering size, first the securities such initiating security holder proposes to register, then the securities of any other selling security holders on a pro rata basis, and lastly the securities we propose to register.

Blackout periods

We will be entitled to one blackout period, aggregating to no more than 90 days in any consecutive 12-month period, during which we can delay the filing or effectiveness of a registration statement, if we would, in the good faith judgment of our board of directors, be required to disclose in the prospectus information not otherwise then required by law to be publicly disclosed, and there is a reasonable likelihood that such disclosure, or any other action to be taken in connection with the prospectus, would materially and adversely affect or interfere with any significant financing, acquisition, merger, disposition of assets, corporate reorganization or other material transaction or negotiations involving us.

Expenses of registration

We will pay all expenses relating to any demand or piggyback registration, except that our Principal Shareholder shall bear and pay all (i) brokerage commissions, (ii) ADS issuance fees payable to any depositary institution, (iii) commissions, fees, spreads, discounts, transfer taxes or stamp duties, (iv) fees and expenses of its counsel or other advisers, subject to certain amounts that we will pay, and (v) its own out-of-pocket expenses.

Related Party Transaction Policy

Our board of directors has adopted a related party transaction policy with effect from the effectiveness date of our registration statement on Form F-1, to set forth the policies and procedures for the review and approval or ratification of related person transactions.

 

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DESCRIPTION OF CERTAIN INDEBTEDNESS

The following is a summary of certain provisions of the agreements evidencing our material indebtedness as of the date of this prospectus. This summary does not purport to be complete, and is subject to, and is qualified in its entirety by reference to, all of the provisions of such agreements and instruments, including the definitions of certain terms therein that are not otherwise defined in this prospectus.

Credit Suisse Facility

On March 16, 2021, we entered into a term loan credit facility agreement with Credit Suisse AG, as amended by an amendment agreement dated May 21, 2021 and as may be amended from time to time thereby. The credit facility provides for borrowings in an aggregate amount of S$252.0 million (US$188.0 million). Contemporaneous with TDCX’s acquisition of our Founder’s shareholder interests in TDCX KY, we drew upon the credit facility on March 23, 2021. Subsequently, we paid the proceeds of S$252.0 million to our Founder for the purchase of his interests in TDCX KY. As of the date of this prospectus, the outstanding principal balance is S$252.7 million (US$188.0 million). We intend to use proceeds from the offering to fully repay this term loan credit facility, including accrued and unpaid interest and premium (if any), in accordance with the terms of this facility agreement. See “Use of Proceeds”.

Interest Rate and Maturity

Borrowings under our credit facility bear interest at a rate per annum equal to an applicable margin of 3.15% over the London interbank offered rate administered by ICE Benchmark Administration Limited, or LIBOR, for the 18 month period after the utilization date under the facility agreement and then, at any time thereafter, 3.45% over LIBOR. The term of the facility is 24 months after the utilization of the facility; provided that the maturity of the loan may be extended for an additional 12-month period.

Repayment and Prepayments

Amounts owed under the facility shall be due and payable at the end of the term, provided that if the term is extended for an additional 12-month period pursuant to the facility agreement, then the principal amount of the facility shall be repaid in three installments, with the first, second and third installments falling due on the dates that are 24 months, 30 months and 36 months after the utilization date of the facility, respectively. Amounts owed under the facility shall be become due and payable on the tenth business day after an initial public offering of shares in our Company. Prepayment of the facility within six months of the utilization date of the facility (other than, among others, in connection with an initial public offering) may result in our payment of a certain make whole amount.

Security, Certain Covenants and Events of Default

All of our obligations under our term loan credit facility agreement are guaranteed by TDCX Holdings and TDCX KY and secured by a mortgage of our Principal Shareholder’s shares in TDCX Inc., TDCX Inc’s shares of TDCX KY and TDCX KY’s shares in TDCX Holdings. Additionally, our Founder is required to maintain an amount equal to 80% of the amount outstanding under the facility deposited in a collateralized bank account with Credit Suisse AG, which shall accrue interest at a rate equal to the rate accrued on borrowings under the facility minus 100 basis points, until, among others, repayment of the facility. We are also required to maintain an interest reserve account and an equity cure account with Credit Suisse AG. Our term loan credit facility agreement contains a number of covenants that, among other things, impose certain restrictions on our ability, subject to certain exceptions, to:

 

   

create or permit any security over our assets or the assets of our subsidiaries;

 

   

be a creditor to any financial indebtedness;

 

   

substantially change the general nature of our business;

 

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declare, make or pay any dividend or other distribution; and

 

   

issue any shares or grant to any person any conditional or unconditional options, warrant or other right to call or otherwise acquire any of our shares or shares of our subsidiaries except in connection with the initial public offering of shares in our Company.

Our term loan credit facility agreement contains financial covenants including: (a) maintaining a ratio of EBITDA to finance charges of not less than 6:1 for a trailing 12-month period at the end of each financial year and financial quarter; and (b) maintaining a ratio of total net debt to EBITDA of not more than 2:1 for a trailing 12-month period at the end of each financial year and quarter.

OCBC China Facility

On August 30, 2019, Agorae Information Consulting (Beijing) Co., Ltd. or Agorae Beijing, one of our wholly owned subsidiaries, entered into a credit letter agreement with OCBC Wing Hang Bank (China) Limited, or OCBC China. The credit letter agreement provides for a revolving credit line in an aggregate amount of RMB12 million. While the term of this agreement is not defined therein, the term of each withdrawal thereunder is no more than six months. The annual interest rate is the applicable one year loan prime rate plus 1%. In addition to customary covenants and events of default, Agorae Beijing undertakes not to pay any dividend to its shareholder or change its shareholding structure without the prior written consent of OCBC China and that any loan provided by its shareholder shall be subordinate to the loan under this agreement. The credit line granted under this agreement is guaranteed by a standby letter of credit provided by OCBC Bank with an amount of US$2 million.

OCBC Facility

On September 18, 2018, TDCX HPL entered into a credit facility with Oversea-Chinese Banking Corporation Limited, or OCBC. By way of an accession letter dated October 10, 2018, TDCX SG became an additional borrower to the credit facility. On April 29, 2019, TDCX SG entered into a revised credit facility with OCBC, which provided for borrowings in an aggregate amount of S$56.5 million and includes a S$7.6 million interest rate derivatives facility, a S$20.0 million advance facility, a S$27.4 million refinancing facility and a S$1.5 million banker’s guarantee. This credit facility was amended on October 16, 2019, to, among other things, provide for a S$5.0 million foreign exchange facility and reduce the S$7.6 million interest rate derivatives facility to S$3.5 million.

On May 17, 2021, TDCX SG entered into a further revised credit facility with OCBC, which provided for borrowings in an aggregate amount of S$45.2 million and includes a S$3.5 million interest rate derivatives facility, a S$5.0 million foreign exchange facility, a S$20.0 million advance facility, a S$15.2 million multi-currency specific advance facility and a S$1.5 million banker’s guarantee, as well as a US$2.0 million standby letter of credit. On August 6, 2021, we utilized S$13.7 million of the multi-currency advance facility that is available pursuant to our facility with OCBC to pay off S$13.7 million of indebtedness outstanding under our refinancing facility that is also available pursuant to our facility with OCBC and which was subsequently extinguished.

On September 3, 2021, TDCX SG entered into a further revised credit facility with OCBC, which provides for borrowings in an aggregate amount of S$43.7 million and includes a S$3.5 million interest rate derivatives facility, a S$5.0 million foreign exchange facility, a S$20.0 million advance facility, a S$13.7 million multi-currency specific advance facility and a S$1.5 million banker’s guarantee, as well as a US$2.0 million standby letter of credit. The credit facility letter dated September 3, 2021 supersedes OCBC’s previous credit facility letters to TDCX SG except for the temporary bridging loan agreement dated April 30, 2020.

On October 16, 2019 and March 18, 2020, we drew down loans of S$10.0 million and S$7.0 million respectively from the advance facility. The facility bears an interest rate of 1.25% per annum over the prevailing cost of funds for the financial institution lender (as determined by the financial institution lender). The loan is repayable on demand.

 

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On April 30, 2020, TDCX SG entered into a temporary bridging loan agreement with the same financial institution lender and subsequently on July 30, 2020, we drew down a principal amount of S$5.0 million. The facility bears an interest rate of 2.5% per annum. The bank loan is denominated in Singapore dollar with 53 equal monthly repayments commencing on March 1, 2021 and matures on August 1, 2025.

As of June 30, 2021, we had S$37.0 million outstanding.

Interest Rate

Borrowings under our advance facility bear interest at a rate per annum equal to an applicable margin of 1.25% over the prevailing cost of funds for OCBC (as determined by OCBC) for interest periods of up to six months. Borrowings under our multi-currency specific advance facility bear interest at a rate per annum equal to an applicable margin of 1.25% over the prevailing cost of funds for OCBC (as determined by OCBC) for interest periods of up to three months. The banker’s guarantee is subject to a commission at 1.00% per annum, subject to a minimum of S$500.

Prepayments

Prepayments under the advance facility or multi-currency specific advance facility is permitted, subject to the payment of applicable break funding costs.

Interest Period and Maturity

Borrowings under the advance facility pursuant to the revised credit facilities letter agreement are repayable on demand and each advance under the advance facility shall be repaid on its due date or rolled over at OCBC’s discretion. Interest periods shall be up to six months in term. Borrowings under the multi-currency specific advance facility are repayable on demand and each advance under the advance facility shall be repaid on its due date or rolled over at OCBC’s discretion. In addition, borrowings under the multi-currency specific advance facility are due in nine equal quarterly instalments of S$1.52 million. Interest periods shall be up to three months in term.

Guarantee and Security

All of our obligations under the revised credit facilities letter agreement are secured by an existing deed of guarantee and indemnity for all monies from our Founder and an existing deed of guarantee and indemnity for all monies from TDCX HPL.

Certain Covenants and Events of Default

This revised credit facilities letter agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, the ability of TDCX SG and certain of its restricted subsidiaries, or collectively with TDCX SG, TDCX SG group, (as applicable) to:

 

   

to incur additional indebtedness and guarantee indebtedness (TDCX SG group);

 

   

create or have outstanding any security over present or future property, undertaking, assets or revenue (TDCX SG group);

 

   

transfer of all or substantially all of our assets (except for the purpose of a reconstruction, amalgamation or reorganization on terms approved prior to such transfer by OCBC) (TDCX SG group);

 

   

remove Laurent Junique as Chief Executive Officer (TDCX SG);

 

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change the general nature of our business (TDCX SG group); and

 

   

seek additional trade and working capital, treasury (including interest hedging and foreign exchange) and/or corporate finance facilities without providing OCBC with a first right to pitch for any of the foregoing (TDCX SG group).

This revised credit facilities letter agreement contains certain financial covenants including: (a) tangible net worth of TDCX SG remaining not less than S$25.0 million at all times; (b) for TDCX SG, a maximum ratio of total indebtedness to tangible net worth not exceeding 2.0x at all times; (c) for TDCX Inc., a maximum ratio of total net debt to EBITDA not exceeding 2.0x at all times; and (d) TDCX Inc. maintains a consolidated ratio of EBITDA divided by short term debt, current position of long term loan and interest repayments of at least 2.0x at all times. None of the financial covenants restrict TDCX from making a distribution to the Founder or incurring new indebtedness.

Notwithstanding the covenants set forth above, as in effect at the time, in 2019, TDCX SG distributed dividends in excess of 50% of its net profit after tax, in respect of which it received a waiver on March 2, 2020. As a result, as of December 31, 2019, amounts outstanding under this loan are classified as a current liability in our consolidated statement of financial position. On September 2, 2020, we obtained a written waiver of loan covenants to distributed dividends in excess of 50% of its net profit after tax for the period effective from August 1, 2020 to December 31, 2020. We were in compliance with our financial covenants for the year ended December 31, 2020 and the six months ended June 30, 2021.

 

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DESCRIPTION OF SHARE CAPITAL

We are an exempted company incorporated with limited liability in the Cayman Islands and, upon completion of this offering, our affairs will be governed by our second amended and restated memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands, which we refer to as the Cayman Companies Act, and the common law of the Cayman Islands.

As of the date of this prospectus, our authorized share capital is US$50,000 divided into 500,000,000 ordinary shares, par value US$0.0001 each.

We plan to adopt a second amended and restated memorandum and articles of association or post-IPO memorandum and articles of association, which will become effective and replace our current amended and restated memorandum and articles of association in its entirety immediately prior to completion of this offering. Our post-IPO memorandum and articles of association will provide that, immediately prior to the completion of this offering, we will have two classes of shares, the Class A ordinary shares and Class B ordinary shares. Our authorized share capital upon immediately prior to the completion of the offering will be US$50,000 divided into 500,000,000 shares comprising (i) 50,000,000 Class A ordinary shares of a par value of US$0.0001 each, (ii) 200,000,000 Class B ordinary shares of a par value of US$0.0001 each and (iii) 250,000,000 undesignated shares of a par value of US$0.0001 each. All of our 123,500,000 ordinary shares, which are issued and outstanding as of the date hereof and which are held by our Principal Shareholder, will be automatically converted by way of re-designation and reclassification of existing shares into Class B ordinary shares on a one-for-one basis immediately prior to the completion of the offering.

The following are summaries of certain material provisions of our post-IPO memorandum and articles of association and the Cayman Companies Act insofar as they relate to the material terms of our shares.

Exempted Company

We are an exempted company incorporated with limited liability under the Cayman Companies Act. The Cayman Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary resident company except for the exemptions and privileges listed below:

 

   

an exempted company does not have to file an annual return disclosing its shareholders with the Registrar of Companies;

 

   

an exempted company is not required to open its register of members for public inspection;

 

   

an exempted company does not have to hold an annual general meeting;

 

   

an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); and

 

   

an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands.

Ordinary Shares

General

All of our issued and outstanding ordinary shares are fully paid and non-assessable. Immediately prior to the completion of this offering, our ordinary shares will be divided into Class A ordinary shares and Class B ordinary shares. Holders of our Class A ordinary shares and Class B ordinary shares will have the same rights except for

 

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voting and conversion rights. Each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to ten votes and is convertible into one Class A ordinary share at any time at the option of the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their ordinary shares. Our post-IPO memorandum and articles prohibit us from issuing bearer or negotiable shares. Our company may not issue shares to bearer and our ordinary shares are issued in registered form, which will be issued when registered in our register of members.

Conversion

Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

Upon any sale, transfer, assignment or disposition of any Class B ordinary share by a shareholder to any person who is not an affiliate of such shareholder, or upon a change of ultimate beneficial ownership of any Class B ordinary share to any person who is not an affiliate of the registered shareholder of such Class B ordinary share, such Class B ordinary share will automatically and immediately convert into one Class A ordinary share.

In addition, each Class B ordinary share will automatically and immediately convert into one Class A ordinary share, upon the earlier of the following:

 

   

The date that is 15 years from the date of effectiveness of the registration statement of which this prospectus forms a part; or

 

   

Nine months after the death or permanent disability of Mr. Laurent Junique.

Dividends

The holders of our ordinary shares are entitled to receive such dividends as may be declared by our board of directors subject to our post-IPO memorandum and articles of association and the Cayman Companies Act. In addition, our shareholders may be ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Under Cayman Islands law, dividends may be paid only out of profits, or out of the share premium account (subject to a solvency test being met on the day immediately following the date that the dividend is paid). No dividend may be declared and paid unless our directors determine that, immediately after the payment, we will be able to pay our debts as they fall due in the ordinary course of business and we have funds lawfully available for such purpose.

Register of Members

Under Cayman Islands law, we must keep a register of members and there must be entered therein:

 

   

the names and addresses of the members, together with a statement of the shares held by each member, and such statement shall confirm (i) the amount paid or agreed to be considered as paid, on the shares of each member, (ii) the number and category of shares held by each member, and (iii) whether each relevant category of shares held by a member carries voting rights under the articles of association of the company, and if so, whether such voting rights are conditional;

 

   

the date on which the name of any person was entered on the register as a member; and

 

   

the date on which any person ceased to be a member.

Under Cayman Islands law, the register of members of our Company is prima facie evidence of the matters set out therein (i.e., the register of members will raise a presumption of fact on the matters referred to above unless

 

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rebutted) and a member registered in the register of members will be deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register of members. Upon the completion of this offering, our register of members will be immediately updated to record and give effect to the issue of Class A ordinary shares by us to JPMorgan Chase Bank, N.A., as the depositary (or its custodian or nominee). Once our register of members has been updated, the shareholders recorded in the register of members shall be deemed to have legal title to the shares set against their name.

If the name of any person is, without sufficient cause, entered in or omitted from the register of members, or if default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member, the person or member aggrieved or any member or our Company itself may apply to the Grand Court of the Cayman Islands for an order that the register be rectified, and the Court may either refuse such application or it may, if satisfied of the justice of the case, make an order for the rectification of the register.

Voting Rights

Holders of our ordinary shares have the right to receive notice of, attend, speak and vote at general meetings of our Company. In respect of matters requiring a shareholder vote, each Class A ordinary share will be entitled to one vote and each Class B ordinary share will be entitled to ten votes. Our Class A ordinary shares and Class B ordinary shares shall vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman of the meeting or one or more shareholder present in person or by proxy holding not less than 10 per cent of the votes attaching to the total issued share capital. An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes cast in a general meeting. A special resolution requires the affirmative vote of no less than two-thirds of the votes cast in a general meeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of our Company, as permitted by the Cayman Companies Act and our post-IPO memorandum and articles of association. A special resolution will be required for important matters such as a change of name or making changes to our memorandum and articles of association and as required in accordance with the Cayman Companies Act.

General Meetings and Shareholder Proposals

As a Cayman Islands exempted company, we are not obliged by the Cayman Companies Act to call shareholders’ annual general meetings. Our post-IPO memorandum and articles of association provide that we may (but are not obliged to) in each year hold a general meeting as our annual general meeting in which case we will specify the meeting as such in the notices calling it, and the annual general meeting will be held at such time and place as may be determined by our directors. We, however, will hold an annual shareholders’ meeting during each fiscal year, as required by the New York Stock Exchange Listed Company Manual.

Cayman Islands law provides limited rights for shareholders to requisition a general meeting. However, additional rights may be provided in a company’s articles of association. Our post-IPO amended and restated memorandum and articles of association allow our shareholders holding shares representing in aggregate not less than one-third (1/3) of the paid up share capital of our Company entitled to vote at general meetings to requisition a shareholder’s meeting.

A quorum required for a meeting of shareholders consists of one or more shareholders holding, in aggregate, at least one-third (1/3) of the votes attaching to all paid up share capital of our Company entitled to vote at general meetings present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative. Advance notice of at least ten clear calendar days is required for the convening of our annual general meeting and other shareholders meetings.

 

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Transfer of Ordinary Shares

Subject to the restrictions in our post-IPO memorandum and articles of association, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by our board of directors.

Our board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Our board of directors may also decline to register any transfer of any ordinary share unless:

 

   

the instrument of transfer is lodged with us, accompanied by the certificate (if any) for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

 

   

the instrument of transfer is in respect of only one class of shares;

 

   

the instrument of transfer is properly stamped, if required;

 

   

in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and

 

   

a fee of such maximum sum as the NYSE may determine to be payable or such lesser sum as our board of directors may from time to time require is paid to us in respect thereof.

If our board of directors refuses to register a transfer it shall, within three calendar months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.

The registration of transfers may, on 10 calendar days’ notice being given by advertisement in such one or more newspapers, by electronic means or by any other means in accordance with the NYSE rules, after compliance with any notice required of the NYSE, be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 calendar days in any calendar year.

Issuance of Additional Shares

Our post-IPO memorandum and articles of association authorizes our board of directors to issue additional ordinary shares from time to time as our board of directors shall determine, to the extent of available authorized but unissued shares. Our post-IPO memorandum and articles of association also authorize our board of directors (or our shareholders, by ordinary resolution) to establish from time to time one or more series of preference shares and to determine, with respect to any series of preference shares, the terms and rights of that series, including:

 

   

the designation of the series;

 

   

the number of shares of the series;

 

   

the dividend rights, dividend rates, conversion rights, voting rights; and

 

   

the rights and terms of redemption and liquidation preferences,

provided that should the creation of any such new class or series of shares have the effect of materially adversely varying the rights of our existing classes of shares, then the separate approval of such affected existing classes would be required.

Our board of directors may issue preference shares without further action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of ordinary shares.

 

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Liquidation

On the winding up of our Company, if the assets available for distribution amongst our shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst our shareholders pro rata in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our Company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that, as nearly as may be, the losses are borne by our shareholders in proportion to the par value of the shares held by them. We are an exempted company incorporated under the Cayman Companies Act with “limited liability”, and under the Cayman Companies Act, the liability of our members is limited to the amount, if any, unpaid on the shares respectively held by them. Our post-IPO memorandum and articles of association contains a declaration that the liability of our members is so limited.

Calls on Ordinary Shares and Forfeiture of Ordinary Shares

Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their ordinary shares in a notice served to such shareholders at least fourteen calendar days prior to the specified time and place of payment. The ordinary shares that have been called upon and remain unpaid on the specified time are subject to forfeiture.

Redemption, Repurchase and Surrender of Ordinary Shares

We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders thereof, on such terms and in such manner as may be determined, before the issue of such shares, by our board of directors or by a special resolution of our shareholders. Our company may also repurchase any of our shares provided that the manner and terms of such purchase have been approved by our board of directors or by ordinary resolution of our shareholders, or are otherwise authorized by our post-IPO memorandum and articles of association. The premium (if any) payable in respect of any shares being redeemed or purchased may be paid out of profits of our Company, out of the share premium account or out of the proceeds of a fresh issue of shares made for the purposes of the redemption or purchase. Alternatively, as authorized under our post-IPO memorandum & articles of association, our Company may make a payment in respect of the redemption or purchase of its own shares out of capital provided that immediately following the date on which the payment out of capital is proposed to be made, our Company shall be able to pay its debts as they fall due in the ordinary course of business. In addition, under the Cayman Companies Act no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no issued shares outstanding, or (c) if the Company has commenced liquidation. In addition, our Company may accept the surrender of any fully paid share for no consideration.

Variation of Rights of Shares

All or any of the rights attached to any class of shares may, unless otherwise provided by the terms of issue of the shares of or the rights attaching to that class, be materially adversely varied with the consent in writing of the holders of at least two-thirds of the issued shares of the relevant class or with the sanction of an ordinary resolution passed at a separate meeting of the holders of the shares of such class.

The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, subject to any rights or restrictions for the time being attached to the shares of that class, be deemed to be materially adversely varied by, inter alia, the creation, allotment or issue of further shares ranking pari passu with or subsequent to them or the redemption or purchase of any shares of any class by the Company. The rights of the holders of shares shall not be deemed to be materially adversely varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights.

 

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Inspection of Books and Records

Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our register of members or our corporate records (other than our memorandum and articles of association, register of mortgages and charges and special resolutions of our shareholders).

Changes in Capital

Our shareholders may from time to time by ordinary resolutions:

 

   

increase the share capital by such sum, to be divided into shares of such classes and amount, as the resolution prescribes;

 

   

consolidate and divide all or any of our share capital into shares of a larger amount than our existing shares;

 

   

convert all or any of its paid up shares into stock and reconvert the stock into paid up shares of any denomination;

 

   

sub-divide our existing shares, or any of them into shares of a smaller amount than that fixed by our post-IPO memorandum of association, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share will be the same as it was in case of the share from which the reduced share is derived; and

 

   

cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so canceled.

Our shareholders may by special resolution reduce our share capital and any capital redemption reserve in any manner authorized by law.

History of Securities Issuances

The following is a summary of our securities issuances in the past three years.

Ordinary Shares

On April 16, 2020, we issued one ordinary share to Mapcal Limited, which was immediately transferred to our Founder on the same day.

On May 21, 2021, we completed a share subdivision pursuant to which each ordinary share was sub-divided into 10,000 ordinary shares, resulting in an increase in the number of issued ordinary shares from one ordinary share to 10,000 ordinary shares. Also on May 21, 2021, immediately following the share subdivision, we issued an additional 123,490,000 additional ordinary shares to our Founder, resulting in an increase in the number of issued ordinary shares from 10,000 ordinary shares to 123,500,000 ordinary shares. On the same day, 123,500,000 ordinary shares were transferred from our Founder to our Principal Shareholder.

Registration Rights Agreement

On September 18, 2021, we entered into a registration rights agreement with our Principal Shareholder, which grants certain registration rights with respect to the Class A Ordinary Shares or ADSs owned by our Principal Shareholder.

Demand registration rights

Our Principal Shareholder will have the right to demand that we effect a registration covering the offer and sale of its Class A Ordinary Shares or ADSs. Our Principal Shareholder is entitled to six such registrations. We,

 

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however, are not required to prepare and file (i) more than two demand registration statements in any 12-month period, or (ii) any demand registration statement within 120 days following the date of effectiveness of any other registration statement. If the demand registration relates to an underwritten public offering and the managing underwriter advises in its reasonable opinion that the number of securities requested to be included in the demand registration exceeds the largest number which reasonably can be sold in such offering without having a material adverse effect on such offering, we will include in such demand registration, up to the maximum offering size, following the order of priority: (i) the registrable securities that the requesting parties propose to register; and (ii) any securities we propose to register and any securities with respect to which any other security holder has requested registration. If the managing underwriter determines that less than all of the registrable securities proposed to be sold can be included in such offering, then the registrable securities that are included in such offering shall be allocated pro rata among the respective requesting parties on the basis of registrable securities sought to be registered by each requesting party.

Shelf registration rights

Once we are eligible to file a shelf registration statement pursuant to Rule 415 promulgated under the Securities Act, our Principal Shareholder will have the right to demand that we file a shelf registration statement covering its Class A Ordinary Shares or ADSs. We, however, will not be required to prepare and file more than two shelf registration statements in any 12-month period.

Piggyback registration rights

If we propose to file a registration statement for an offering of our securities, other than in a transaction of the type referred to in Rule 145 under the Securities Act or to our employees pursuant to any employee benefit plan, then we must offer our Principal Shareholder an opportunity to include in the registration all or any part of its registrable securities. If the piggyback registration relates to an underwritten public offering and the managing underwriter advises in its reasonable opinion that the number of securities requested to be included in the piggyback registration together with the securities being registered by us or any other security holder exceeds the largest number which reasonably can be sold in such offering without having a material adverse effect on such offering, then (i) if we initiate the piggyback registration, we will include in such registration the securities we propose to register first, and allocate the remaining part of the maximum offering size to all other selling security holders on a pro rata basis; (ii) if any holder of our securities initiated the piggyback registration, we will include, up to the maximum offering size, first the securities such initiating security holder proposes to register, then the securities of any other selling security holders on a pro rata basis, and lastly the securities we propose to register.

Blackout periods

We will be entitled to one blackout period, aggregating to no more than 90 days in any consecutive 12-month period, during which we can delay the filing or effectiveness of a registration statement, if we would, in the good faith judgment of our board of directors, be required to disclose in the prospectus information not otherwise then required by law to be publicly disclosed, and there is a reasonable likelihood that such disclosure, or any other action to be taken in connection with the prospectus, would materially and adversely affect or interfere with any significant financing, acquisition, merger, disposition of assets, corporate reorganization or other material transaction or negotiations involving us.

Expenses of registration

We will pay all expenses relating to any demand or piggyback registration, except that our Principal Shareholder shall bear and pay all (i) brokerage commissions, (ii) ADS issuance fees payable to any depositary institution, (iii) commissions, fees, spreads, discounts, transfer taxes or stamp duties, (iv) fees and expenses of its counsel or other advisers, subject to certain amounts that we will pay, and (v) its own out-of-pocket expenses.

 

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CERTAIN CAYMAN ISLANDS COMPANY CONSIDERATIONS

We are an exempted company incorporated under the laws of the Cayman Islands. The following discussion summarizes material differences between the rights of holders of our ordinary shares and the rights of holders of the common stock of a typical corporation incorporated under the laws of the State of Delaware which result from differences in the laws of the Cayman Islands and Delaware.

This discussion does not purport to be a complete statement of the rights of holders of our ordinary shares under applicable law in the Cayman Islands or the rights of holders of the common stock of a typical corporation under applicable Delaware law.

Our corporate affairs are governed by our memorandum and articles of association, as we expect them to be amended and restated with effect upon completion of this offering, by the Companies Act of the Cayman Islands and the common law of the Cayman Islands. We cannot predict whether Cayman Islands courts would reach the same conclusions as Delaware or other courts in the United States. Accordingly, you may have more difficulty in protecting your interests under Cayman Islands law in the face of actions by our management, directors or controlling shareholder than would shareholders of a corporation incorporated in a U.S. jurisdiction that has developed a substantial body of case law.

Differences in Corporate Law

The Companies Act is modeled after that of English law but does not follow recent statutory enactments in England. In addition, the Companies Act differs from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the State of Delaware.

Mergers and Similar Arrangements

The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (a) “merger” means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (b) a “consolidation” means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company.

In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company’s articles of association.

In order to effect such a merger or consolidation, Cayman Islands law requires a written plan of merger or consolidation to be approved by the directors of each constituent company and authorization by (a) a special resolution of the shareholders of each constituent company and (b) such other authorization, if any, as may be specified in such constituent company’s articles of association.

A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders of that Cayman subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that member agrees otherwise. For this purpose, a subsidiary is a company of which at least ninety percent (90%) of the issued shares entitled to vote are owned by the parent company.

The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands.

 

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The written plan of merger or consolidation must be filed with the Registrar of Companies in the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a declaration as to the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger and consolidation will be published in the Cayman Islands Gazette. Save in certain circumstances, a dissenting shareholder of a Cayman constituent company is entitled to payment of the fair value of his shares upon dissenting to a merger or consolidation. The fair value of the shares will be determined by the Cayman Islands court if it cannot be agreed among the parties. The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful. Court approval is not required for a merger or consolidation effected in compliance with these statutory procedures.

In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, by way of schemes of arrangement, provided that the arrangement is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

 

   

the statutory provisions as to the required majority vote have been met;

 

   

the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;

 

   

the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and

 

   

the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.

Alternatively, Cayman Islands law also contains a statutory power of compulsory acquisition which may facilitate the “squeeze out” of dissentient minority shareholder upon a takeover offer. When a takeover offer is made and accepted by holders of 90.0% of the shares affected within four months, the offeror may, within a two-month period commencing on the expiration of such four month period, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.

If an arrangement and reconstruction by way of scheme of arrangement is thus approved, or if a takeover offer is made and accepted in accordance with the foregoing statutory procedures, the dissenting shareholder would have no rights comparable to appraisal rights, save that objectors to a takeover offer may apply to the Grand Court of the Cayman Islands for various orders that the Grand Court of the Cayman Islands has a broad discretion to make, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

Shareholders’ Suits

Derivative actions have been brought in the Cayman Islands courts. In principle, the Company will be the proper plaintiff in any claim based on a breach of duty owed to it, and a claim against (for example) the Company’s officers or directors usually may not be brought by a shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, the Cayman

 

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Islands courts can be expected (and have had occasion) to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto) which permit a minority shareholder to commence a class action against, or derivative actions in the name of our Company when:

 

   

a company acts or proposes to act illegally or ultra vires and is therefore incapable of ratification by the shareholders;

 

   

the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and

 

   

those who control the Company are perpetrating a “fraud on the minority.”

A shareholder may have a direct right of action against the Company where the individual rights of that shareholder have been infringed or are about to be infringed.

Indemnification of Directors and Executive Officers and Limitation of Liability

Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our post-offering amended and restated memorandum and articles of association, which will become effective immediately prior to the completion of this offering, will permit, to the fullest extent permissible under Cayman Islands law, indemnification of our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by them, other than by reason of their own dishonesty, willful default or fraud, in connection with the execution or discharge of their duties, powers, authorities or discretion as directors or officers of our Company, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by them in defending (whether successfully or otherwise) any civil proceedings concerning our Company or its affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we have entered into indemnification agreements with our directors and executive officers that provide such persons with additional indemnification beyond that provided in our post-offering amended and restated memorandum and articles of association.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Directors’ Fiduciary Duties

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

 

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As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the Company and therefore it is considered that he or she owes the following duties to the Company: a duty to act bona fide in the best interests of the Company; a duty not to make a personal profit based on his or her position as director (unless the Company permits him or her to do so) and a duty not to put himself or herself in a position where the interests of the Company conflict with his or her personal interest or his or her duty to a third party. A director of a Cayman Islands company owes to the Company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.

Under our post-offering amended and restated memorandum and articles of association, a director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction with our Company must declare the nature of their interest at a meeting of the board of directors. Following such declaration, and subject to the rules of the New York Stock Exchange and disqualification by the chairman of the relevant board meeting, a director may vote in respect of any contract or transaction or proposed contract or transaction notwithstanding his or her interest and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the directors at which any such contract or transaction or proposed contract or transaction shall come before the meeting for consideration.

Shareholder Action by Written Consent

Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. Cayman Islands law and our post-offering second amended and restated articles of association provide that shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.

Shareholder Proposals

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

Cayman Islands law does not provide shareholders any right to put a proposal before a meeting or requisition a general meeting. However, these rights may be provided in a company’s articles of association. Our post-offering amended and restated articles of association allow our shareholders holding not less than one-third of all votes attaching to all issued and outstanding shares of our company to requisition a shareholder’s meeting, in which case our board of directors will be obliged to convene an extraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting. Other than this right to requisition a shareholders’ meeting, our post-offering amended and restated articles of association do not provide our shareholders any other right to put a proposal before a shareholders’ general meeting. As an exempted company in the Cayman Islands, we are not obliged by law to call shareholders’ annual general meetings.

Cumulative Voting

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but our post-offering amended and restated articles of

 

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association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

Removal of Directors

Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our post-offering amended and restated articles of association, directors may be removed with or without cause, by an ordinary resolution of our shareholders. An appointment of a director may be on terms that the director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between the Company and the director, if any; but no such term shall be implied in the absence of express provision. In addition, a director’s office shall be vacated if the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his office by notice in writing to the Company; (iv) without special leave of absence from our board of directors, is absent from three consecutive meetings of the board of directors and the board of directors resolves that his office be vacated or, (v) is removed from office pursuant to any other provisions of our post-offering amended and restated articles of association.

Transactions with Interested Shareholders

The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the Company and not with the effect of constituting a fraud on the minority shareholders.

Dissolution and Winding up

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. Under Cayman Islands law, a company may be wound up either compulsorily by an order of the courts of the Cayman Islands or voluntarily, by a special resolution of its members or on the occurrence of an event or expiry of period specified in its articles of association, or, if the Company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so. Under the Companies Act and our post-offering second amended and restated articles of association, our Company may commence winding up upon the passing of a special resolution of our shareholders.

 

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Variation of Rights of Shares

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Islands law and our post-offering second amended and restated articles of association, if our share capital is divided into more than one class of shares, the rights attached to any such class may be materially adversely varied with the consent in writing of the holders of two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class.

Amendment of Governing Documents

Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by Cayman Islands law, our post-offering amended and restated memorandum and articles of association may only be amended with a special resolution of our shareholders.

Rights of Non-resident or Foreign Shareholders

There are no limitations imposed by our post-offering amended and restated memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our post-offering amended and restated memorandum and articles of association that require our company to disclose shareholder ownership above any particular ownership threshold.

 

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DESCRIPTION OF AMERICAN DEPOSITARY SHARES

American Depositary Receipts

JPMorgan Chase Bank, N.A. (“JPMorgan”), as depositary, will issue the ADSs which you will be entitled to receive in this offering. Each ADS will represent an ownership interest in a designated number of shares which we will deposit with the custodian, as agent of the depositary, under the deposit agreement among ourselves, the depositary, yourself as an ADR holder and all other ADR holders, and all beneficial owners of an interest in the ADSs evidenced by ADRs from time to time.

The depositary’s office is located at 383 Madison Avenue, Floor 11, New York, NY 10179.

The ADS to share ratio is subject to amendment as provided in the form of ADR (which may give rise to fees contemplated by the form of ADR). In the future, each ADS will also represent any securities, cash or other property deposited with the depositary but which they have not distributed directly to you.

A beneficial owner is any person or entity having a beneficial ownership interest in ADSs. A beneficial owner need not be the holder of the ADR evidencing such ADS. If a beneficial owner of ADSs is not an ADR holder, it must rely on the holder of the ADR(s) evidencing such ADSs in order to assert any rights or receive any benefits under the deposit agreement. A beneficial owner shall only be able to exercise any right or receive any benefit under the deposit agreement solely through the holder of the ADR(s) evidencing the ADSs owned by such beneficial owner. The arrangements between a beneficial owner of ADSs and the holder of the corresponding ADRs may affect the beneficial owner’s ability to exercise any rights it may have.

An ADR holder shall be deemed to have all requisite authority to act on behalf of any and all beneficial owners of the ADSs evidenced by the ADRs registered in such ADR holder’s name for all purposes under the deposit agreement and ADRs. The depositary’s only notification obligations under the deposit agreement and the ADRs is to registered ADR holders. Notice to an ADR holder shall be deemed, for all purposes of the deposit agreement and the ADRs, to constitute notice to any and all beneficial owners of the ADSs evidenced by such ADR holder’s ADRs.

Unless certificated ADRs are specifically requested, all ADSs will be issued on the books of our depositary in book-entry form and periodic statements will be mailed to you which reflect your ownership interest in such ADSs. In our description, references to American depositary receipts or ADRs shall include the statements you will receive which reflect your ownership of ADSs.

You may hold ADSs either directly or indirectly through your broker or other financial institution. If you hold ADSs directly, by having an ADS registered in your name on the books of the depositary, you are an ADR holder. This description assumes you hold your ADSs directly. If you hold the ADSs through your broker or financial institution nominee, you must rely on the procedures of such broker or financial institution to assert the rights of an ADR holder described in this section. You should consult with your broker or financial institution to find out what those procedures are.

As an ADR holder or beneficial owner, we will not treat you as a shareholder of ours and you will not have any shareholder rights. Cayman Island law governs shareholder rights. Because the depositary or its nominee will be the shareholder of record for the shares represented by all outstanding ADSs, shareholder rights rest with such record holder. Your rights are those of an ADR holder or of a beneficial owner. Such rights derive from the terms of the deposit agreement to be entered into among us, the depositary and all holders and beneficial owners from time to time of ADRs issued under the deposit agreement and, in the case of a beneficial owner, from the arrangements between the beneficial owner and the holder of the corresponding ADRs. The obligations of the depositary and its agents are also set out in the deposit agreement. Because the depositary or its nominee will actually be the registered owner of the shares, you must rely on it to exercise the rights of a shareholder on your behalf.

 

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The following is a summary of what we believe to be the material terms of the deposit agreement. Notwithstanding this, because it is a summary, it may not contain all the information that you may otherwise deem important. For more complete information, you should read the entire deposit agreement and the form of ADR which contains the terms of your ADSs. You can read a copy of the deposit agreement which is filed as an exhibit to the registration statement of which this prospectus forms a part. You may also obtain a copy of the deposit agreement at the SEC’s Public Reference Room which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-732-0330. You may also find the registration statement and the attached deposit agreement on the SEC’s website at http://www.sec.gov.

Share Dividends and Other Distributions

How will I receive dividends and other distributions on the shares underlying my ADSs?

We may make various types of distributions with respect to our securities. The depositary has agreed that, to the extent practicable, it will pay to you the cash dividends or other distributions it or the custodian receives on shares or other deposited securities, after converting any cash received into U.S. dollars (if it determines such conversion may be made on a reasonable basis) and, in all cases, making any necessary deductions provided for in the deposit agreement. The depositary may utilize a division, branch or affiliate of JPMorgan to direct, manage, and/or execute any public and/or private sale of securities under the deposit agreement. Such division, branch, and/or affiliate may charge the depositary a fee in connection with such sales, which fee is considered an expense of the depositary. You will receive these distributions in proportion to the number of underlying securities that your ADSs represent.

Except as stated below, the depositary will deliver such distributions to ADR holders in proportion to their interests in the following manner:

 

   

Cash. The depositary will distribute any U.S. dollars available to it resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof (to the extent applicable), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or impracticable with respect to certain registered ADR holders, and (iii) deduction of the depositary’s and/or its agents’ expenses in (1) converting any foreign currency to U.S. dollars to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or U.S. dollars to the United States by such means as the depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time, and (4) making any sale by public or private means in any commercially reasonable manner. If exchange rates fluctuate during a time when the depositary cannot convert a foreign currency, you may lose some or all of the value of the distribution.

 

   

Shares. In the case of a distribution in shares, the depositary will issue additional ADRs to evidence the number of ADSs representing such shares. Only whole ADSs will be issued. Any shares which would result in fractional ADSs will be sold and the net proceeds will be distributed in the same manner as cash to the ADR holders entitled thereto.

 

   

Rights to receive additional shares. In the case of a distribution of rights to subscribe for additional shares or other rights, if we timely provide evidence satisfactory to the depositary that it may lawfully distribute such rights, the depositary will distribute warrants or other instruments in the discretion of the depositary representing such rights. However, if we do not timely furnish such evidence, the depositary may:

 

  (i)

sell such rights if practicable and distribute the net proceeds in the same manner as cash to the ADR holders entitled thereto; or

 

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  (ii)

if it is not practicable to sell such rights by reason of the non-transferability of the rights, limited markets therefor, their short duration or otherwise, do nothing and allow such rights to lapse, in which case ADR holders will receive nothing and the rights may lapse.

 

   

Other Distributions. In the case of a distribution of securities or property other than those described above, the depositary may either (i) distribute such securities or property in any manner it deems equitable and practicable or (ii) to the extent the depositary deems distribution of such securities or property not to be equitable and practicable, sell such securities or property and distribute any net proceeds in the same way it distributes cash.

If the depositary determines in its discretion that any distribution described above is not practicable with respect to any specific registered ADR holder, the depositary may choose any method of distribution that it deems practicable for such ADR holder, including the distribution of foreign currency, securities or property, or it may retain such items, without paying interest on or investing them, on behalf of the ADR holder as deposited securities, in which case the ADSs will also represent the retained items.

Any U.S. dollars will be distributed by checks drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability and dealt with by the depositary in accordance with its then current practices.

The depositary is not responsible if it fails to determine that any distribution or action is lawful or reasonably practicable.

There can be no assurance that the depositary will be able to convert any currency at a specified exchange rate or sell any property, rights, shares or other securities at a specified price, nor that any of such transactions can be completed within a specified time period. All purchases and sales of securities will be handled by the depositary in accordance with its then current policies, which are currently set forth on the “Disclosures” page (or successor page) of www.adr.com (as updated by the depositary from time to time, “ADR.com”).

Deposit, Withdrawal, and Cancellation

How does the depositary issue ADSs?

The depositary will issue ADSs if you or your broker deposit shares or evidence of rights to receive shares with the custodian and pay the fees and expenses owing to the depositary in connection with such issuance. In the case of the ADSs to be issued under this prospectus, we will arrange with the underwriters named herein to deposit such shares.

Shares deposited in the future with the custodian must be accompanied by certain delivery documentation and shall, at the time of such deposit, be registered in the name of JPMorgan Chase Bank, N.A., as depositary for the benefit of holders of ADRs or in such other name as the depositary shall direct.

The custodian will hold all deposited shares (including those being deposited by or on our behalf in connection with the offering to which this prospectus relates) for the account and to the order of the depositary, in each case for the benefit of ADR holders. ADR holders and beneficial owners thus have no direct ownership interest in the shares and only have such rights as are contained in the deposit agreement. The custodian will also hold any additional securities, property and cash received on or in substitution for the deposited shares. The deposited shares and any such additional items are referred to as “deposited securities”.

Deposited securities are not intended to, and shall not, constitute proprietary assets of the depositary, the custodian or their nominees. Beneficial ownership in deposited securities is intended to be, and shall at all times during the term of the deposit agreement continue to be, vested in the beneficial owners of the ADSs representing such deposited securities. Notwithstanding anything else contained herein, in the deposit agreement, in the form

 

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of ADR and/or in any outstanding ADSs, the depositary, the custodian and their respective nominees are intended to be, and shall at all times during the term of the deposit agreement be, the record holder(s) only of the deposited securities represented by the ADSs for the benefit of the ADR holders. The depositary, on its own behalf and on behalf of the custodian and their respective nominees, disclaims any beneficial ownership interest in the deposited securities held on behalf of the ADR holders.

Upon each deposit of shares, receipt of related delivery documentation and compliance with the other provisions of the deposit agreement, including the payment of the fees and charges of the depositary and any taxes or other fees or charges owing, the depositary will issue an ADR or ADRs in the name or upon the order of the person entitled thereto evidencing the number of ADSs to which such person is entitled. All of the ADSs issued will, unless specifically requested to the contrary, be part of the depositary’s direct registration system, and a registered holder will receive periodic statements from the depositary which will show the number of ADSs registered in such holder’s name. An ADR holder can request that the ADSs not be held through the depositary’s direct registration system and that a certificated ADR be issued.

How do ADR holders cancel an ADS and obtain deposited securities?

When you turn in your ADR certificate at the depositary’s office, or when you provide proper instructions and documentation in the case of direct registration ADSs, the depositary will, upon payment of certain applicable fees, charges, and taxes, deliver the underlying shares to you or upon your written order. Delivery of deposited securities in certificated form will be made at the custodian’s office. At your risk, expense and request, the depositary may deliver deposited securities at such other place as you may request.

The depositary may only restrict the withdrawal of deposited securities in connection with:

 

   

temporary delays caused by closing our transfer books or those of the depositary or the deposit of shares in connection with voting at a shareholders’ meeting, or the payment of dividends;

 

   

the payment of fees, taxes, and similar charges; or

 

   

compliance with any U.S. or foreign laws or governmental regulations relating to the ADRs or to the withdrawal of deposited securities.

This right of withdrawal may not be limited by any other provision of the deposit agreement.

Record Dates

The depositary may, after consultation with us if practicable, fix record dates (which, to the extent applicable, shall be as near as practicable to any corresponding record dates set by us) for the determination of the registered ADR holders who will be entitled (or obligated, as the case may be):

 

   

to receive any distribution on or in respect of deposited securities,

 

   

to give instructions for the exercise of voting rights at a meeting of holders of shares, or

 

   

to pay the fee assessed by the depositary for administration of the ADR program and for any expenses as provided for in the ADR,

 

   

to receive any notice or to act in respect of other matters,

all subject to the provisions of the deposit agreement.

 

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Voting Rights

How do I vote?

If you are an ADR holder and the depositary asks you to provide it with voting instructions, you may instruct the depositary how to exercise the voting rights for the shares which underlie your ADSs. As soon as practicable after receipt from us of notice of any meeting at which the holders of shares are entitled to vote, or of our solicitation of consents or proxies from holders of shares, the depositary shall fix the ADS record date in accordance with the provisions of the deposit agreement, provided that if the depositary receives a written request from us in a timely manner and at least 30 days prior to the date of such vote or meeting, the depositary shall, at our expense, distribute to the registered ADR holders a “voting notice” stating (i) final information particular to such vote and meeting and any solicitation materials, (ii) that each ADR holder on the record date set by the depositary will, subject to any applicable provisions of Cayman Islands law, be entitled to instruct the depositary as to the exercise of the voting rights, if any, pertaining to the deposited securities represented by the ADSs evidenced by such ADR holder’s ADRs, and (iii) the manner in which such instructions may be given or deemed to be given pursuant to the terms of the deposit agreement, including instructions for giving a discretionary proxy to a person designated by us. Each ADR holder shall be solely responsible for the forwarding of voting notices to the beneficial owners of ADSs registered in such ADR holder’s name. There is no guarantee that ADR holders and beneficial owners generally or any holder or beneficial owner in particular will receive the notice described above with sufficient time to enable such ADR holder or beneficial owner to return any voting instructions to the depositary in a timely manner.

Following actual receipt by the ADR department responsible for proxies and voting of ADR holders’ instructions (including, without limitation, instructions of any entity or entities acting on behalf of the nominee for DTC), the depositary shall, in the manner and on or before the time established by the depositary for such purpose, endeavor to vote or cause to be voted the deposited securities represented by the ADSs evidenced by such ADR holders’ ADRs in accordance with such instructions insofar as practicable and permitted under the provisions of or governing deposited securities.

To the extent that (i) we have provided the depositary with at least 35 days’ notice of the proposed meeting, (ii) the voting notice will be received by all ADR holders and beneficial owners no less than 10 days prior to the date of the meeting and/or the cut-off date for the solicitation of consents, and (iii) the depositary does not receive instructions on a particular agenda item from an ADR holder (including, without limitation, any entity or entities acting on behalf of the nominee for DTC) in a timely manner, such ADR holder shall be deemed, and in the deposit agreement the depositary is instructed to deem such ADR holder, to have instructed the depositary to give a discretionary proxy for such agenda item(s) to a person designated by us to vote the deposited securities represented by the ADSs for which actual instructions were not so given by all such ADR holders on such agenda item(s), provided that no such instruction shall be deemed given and no discretionary proxy shall be given unless (1) we inform the depositary in writing (and we agree to provide the depositary with such instruction promptly in writing) that (a) we wish such proxy to be given with respect to such agenda item(s), (b) there is no substantial opposition existing with respect to such agenda item(s), and (c) such agenda item(s), if approved, would not materially or adversely affect the rights of holders of shares, and (2) the depositary has obtained an opinion of counsel, in form and substance satisfactory to the depositary, confirming that (A) the granting of such discretionary proxy does not subject the depositary to any reporting obligations in the Cayman Islands, (B) the granting of such proxy will not result in a violation of the laws, rules, regulations or permits of the Cayman Islands, (C) the voting arrangement and deemed instruction as contemplated herein will be given effect under the laws, rules, and regulations of the Cayman Islands, and (D) the granting of such discretionary proxy will not under any circumstances result in the shares represented by the ADSs being treated as assets of the depositary under the laws, rules or regulations of the Cayman Islands.

The depositary may from time to time access information available to it to consider whether any of the circumstances described above exist, or request additional information from us in respect thereto. By taking any such action, the depositary shall not in any way be deemed or inferred to have been required, or have had any

 

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duty or responsibility (contractual or otherwise), to monitor or inquire whether any of the circumstances described above existed. In addition to the limitations provided for in the deposit agreement, ADR holders and beneficial owners are advised and agree that (a) the depositary will rely fully and exclusively on us to inform it of any of the circumstances set forth above, and (b) neither the depositary, the custodian nor any of their respective agents shall be obliged to inquire or investigate whether any of the circumstances described above exist and/or whether we complied with our obligation to timely inform the depositary of such circumstances. Neither the depositary, the custodian nor any of their respective agents shall incur any liability to ADR holders or beneficial owners (i) as a result of our failure to determine that any of the circumstances described above exist or our failure to timely notify the depositary of any such circumstances or (ii) if any agenda item which is approved at a meeting has, or is claimed to have, a material or adverse effect on the rights of holders of shares. Because there is no guarantee that ADR holders and beneficial owners will receive the notices described above with sufficient time to enable such ADR holders or beneficial owners to return any voting instructions to the depositary in a timely manner, ADR holders and beneficial owners may be deemed to have instructed the depositary to give a discretionary proxy to a person designated by us in such circumstances, and neither the depositary, the custodian nor any of their respective agents shall incur any liability to ADR holders or beneficial owners in such circumstances.

ADR holders are strongly encouraged to forward their voting instructions to the depositary as soon as possible. For instructions to be valid, the ADR department of the depositary that is responsible for proxies and voting must receive them in the manner and on or before the time specified, notwithstanding that such instructions may have been physically received by the depositary prior to such time. The depositary will not itself exercise any voting discretion in respect of deposited securities. The depositary and its agents will not be responsible for any failure to carry out any instructions to vote any of the deposited securities, for the manner in which any voting instructions are given or deemed to be given in accordance with the terms of the deposit agreement, including instructions to give a discretionary proxy to a person designated by us, for the manner in which any vote is cast, including, without limitation, any vote cast by a person to whom the depositary is instructed to grant a discretionary proxy (or deemed to have been in-structed pursuant to the terms of the deposit agreement), or for the effect of any such vote. Notwithstanding anything contained in the deposit agreement or any ADR, the depositary may, to the extent not prohibited by any law, regulation, or requirement of the stock exchange on which the ADSs are listed, in lieu of distribution of the materials pro-vided to the depositary in connection with any meeting of or solicitation of consents or proxies from holders of deposited securities, distribute to the registered holders of ADRs a notice that provides such ADR holders with or otherwise publicizes to such ADR holders instructions on how to retrieve such materials or receive such materials upon request (i.e., by reference to a website containing the materials for retrieval or a contact for re-questing copies of the materials).

We have advised the depositary that under Cayman Islands law and our constituent documents, each as in effect as of the date of the deposit agreement, voting at any meeting of shareholders is by show of hands unless a poll is (before or on the declaration of the results of the show of hands) demanded. In the event that voting on any resolution or matter is conducted on a show of hands basis in accordance with our constituent documents, the depositary will refrain from voting and the voting instructions received by the depositary from ADR holders shall lapse. The depositary will not demand a poll or join in demanding a poll, whether or not requested to do so by ADR holders or beneficial owners.

There is no guarantee that you will receive voting materials in time to instruct the depositary to vote and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote.

Reports and Other Communications

Will ADR holders be able to view our reports?

The depositary will make available for inspection by ADR holders at the offices of the depositary and the custodian the deposit agreement, the provisions of or governing deposited securities, and any written

 

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communications from us which are both received by the custodian or its nominee as a holder of deposited securities and made generally available to the holders of deposited securities.

Additionally, if we make any written communications generally available to holders of our shares, and we furnish copies thereof (or English translations or summaries) to the depositary, it will distribute the same to registered ADR holders.

Fees and Expenses

What fees and expenses will I be responsible for paying?

The depositary may charge each person to whom ADSs are issued, including, without limitation, issuances against deposits of shares, issuances in respect of share distributions, rights and other distributions, issuances pursuant to a stock dividend or stock split declared by us or issuances pursuant to a merger, exchange of securities, or any other transaction or event affecting the ADSs or deposited securities, and each person surrendering ADSs for withdrawal of deposited securities or whose ADRs are cancelled or reduced for any other reason, $5.00 for each 100 ADSs (or any portion thereof) issued, delivered, reduced, cancelled or surrendered, or upon which a share distribution or elective distribution is made or offered, as the case may be. The depositary may sell (by public or private sale) sufficient securities and property received in respect of a share distribution, rights, and/or other distribution prior to such deposit to pay such charge.

The following additional charges shall also be incurred by the ADR holders, the beneficial owners, by any party depositing or withdrawing shares or by any party surrendering ADSs and/or to whom ADSs are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by us or an exchange of stock regarding the ADSs or the deposited securities or a distribution of ADSs), whichever is applicable:

 

   

a fee of US$1.50 per ADR or ADRs for transfers of certificated or direct registration ADRs;

 

   

a fee of US$0.05 or less per ADS held for any cash distribution made, or for any elective cash/stock dividend offered, pursuant to the deposit agreement;

 

   

an aggregate fee of US$0.05 or less per ADS per calendar year (or portion thereof) for services performed by the depositary in administering the ADRs (which fee may be charged on a periodic basis during each calendar year and shall be assessed against holders of ADRs as of the record date or record dates set by the depositary during each calendar year and shall be payable in the manner described in the next succeeding provision);

 

   

a fee for the reimbursement of such fees, charges, and expenses as are incurred by the depositary and/or any of its agents (including, without limitation, the custodian and expenses incurred on behalf of ADR holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in connection with the servicing of the shares or other deposited securities, the sale of securities (including, without limitation, deposited securities), the delivery of deposited securities or otherwise in connection with the depositary’s or its custodian’s compliance with applicable law, rule or regulation (which fees and charges shall be assessed on a proportionate basis against ADR holders as of the record date or dates set by the depositary and shall be payable at the sole discretion of the depositary by billing such ADR holders or by deducting such charge from one or more cash dividends or other cash distributions);

 

   

a fee for the distribution of securities (or the sale of securities in connection with a distribution), such fee being in an amount equal to the $0.05 per ADS issuance fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities (treating all such securities as if they were shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the depositary to those ADR holders entitled thereto;

 

   

stock transfer or other taxes and other governmental charges;

 

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cable, telex, and facsimile transmission and delivery charges incurred at your request in connection with the deposit or delivery of shares, ADRs or deposited securities;

 

   

transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities; and

 

   

fees of any division, branch or affiliate of the depositary utilized by the depositary to direct, manage, and/or execute any public and/or private sale of securities under the deposit agreement.

To facilitate the administration of various depositary receipt transactions, including disbursement of dividends or other cash distributions and other corporate actions, the depositary may engage the foreign exchange desk within JPMorgan Chase Bank, N.A. (the “Bank”) and/or its affiliates in order to enter into spot foreign exchange transactions to convert foreign currency into U.S. dollars. For certain currencies, foreign exchange transactions are entered into with the Bank or an affiliate, as the case may be, acting in a principal capacity. For other currencies, foreign exchange transactions are routed directly to and managed by an unaffiliated local custodian (or other third party local liquidity provider), and neither the Bank nor any of its affiliates is a party to such foreign exchange transactions.

The foreign exchange rate applied to an foreign exchange transaction will be either (a) a published benchmark rate, or (b) a rate determined by a third party local liquidity provider, in each case plus or minus a spread, as applicable. The depositary will disclose which foreign exchange rate and spread, if any, apply to such currency on the “Disclosures” page (or successor page) of ADR.com. Such applicable foreign exchange rate and spread may (and neither the depositary, the Bank nor any of their affiliates is under any obligation to ensure that such rate does not) differ from rates and spreads at which comparable transactions are entered into with other customers or the range of foreign exchange rates and spreads at which the Bank or any of its affiliates enters into foreign exchange transactions in the relevant currency pair on the date of the foreign exchange transaction. Additionally, the timing of execution of an foreign exchange transaction varies according to local market dynamics, which may include regulatory requirements, market hours and liquidity in the foreign exchange market or other factors. Furthermore, the Bank and its affiliates may manage the associated risks of their position in the market in a manner they deem appropriate without regard to the impact of such activities on the depositary, us, holders or beneficial owners. The spread applied does not reflect any gains or losses that may be earned or incurred by the Bank and its affiliates as a result of risk management or other hedging related activity.

Notwithstanding the foregoing, to the extent we provide U.S. dollars to the depositary, neither the Bank nor any of its affiliates will execute a foreign exchange transaction as set forth herein. In such case, the depositary will distribute the U.S. dollars received from us.

Further details relating to the applicable foreign exchange rate, the applicable spread and the execution of foreign exchange transactions will be provided by the depositary on ADR.com. Each holder and beneficial owner by holding or owning an ADR or ADS or an interest therein, and we, each acknowledge and agree that the terms applicable to foreign exchange transactions disclosed from time to time on ADR.com will apply to any foreign exchange transaction executed pursuant to the deposit agreement.

We will pay all other charges and expenses of the depositary and any agent of the depositary (except the custodian) pursuant to agreements from time to time between us and the depositary.

The right of the depositary to receive payment of fees, charges, and expenses survives the termination of the deposit agreement, and shall extend for those fees, charges, and expenses incurred prior to the effectiveness of any resignation or removal of the depositary.

The fees and charges described above may be amended from time to time by agreement between us and the depositary.

 

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The depositary may make available to us a set amount or a portion of the depositary fees charged in respect of the ADR program or otherwise upon such terms and conditions as we and the depositary may agree from time to time. The depositary collects its fees for issuance and cancellation of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions, or by directly billing investors, or by charging the book-entry system accounts of participants acting for them. The depositary will generally set off the amounts owing from distributions made to holders of ADSs. If, however, no distribution exists and payment owing is not timely received by the depositary, the depositary may refuse to provide any further services to ADR holders that have not paid those fees and expenses owing until such fees and expenses have been paid. At the discretion of the depositary, all fees and charges owing under the deposit agreement are due in advance and/or when declared owing by the depositary.

Payment of Taxes

ADR holders or beneficial owners must pay any tax or other governmental charge payable by the custodian or the depositary on any ADS or ADR, deposited security or distribution. If any taxes or other governmental charges (including any penalties and/or interest) shall become payable by or on behalf of the custodian or the depositary with respect to any ADR, any deposited securities represented by the ADSs evidenced thereby or any distribution thereon, such tax or other governmental charge shall be paid by the ADR holder thereof to the depositary and by holding or owning, or having held or owned, an ADR or any ADSs evidenced thereby, the ADR holder and all beneficial owners thereof, and all prior ADR holders and beneficial owners thereof, jointly and severally, agree to indemnify, defend and save harmless each of the depositary and its agents in respect of such tax or other governmental charge. Notwithstanding the depositary’s right to seek payment from current and former beneficial owners, by holding or owning, or having held or owned, an ADR, the ADR holder thereof (and prior ADR holder thereof) acknowledges and agrees that the depositary has no obligation to seek payment of amounts owing from any current or former beneficial owner. If an ADR holder owes any tax or other governmental charge, the depositary may (i) deduct the amount thereof from any cash distributions, or (ii) sell deposited securities (by public or private sale) and deduct the amount owing from the net proceeds of such sale. In either case the ADR holder remains liable for any shortfall. If any tax or governmental charge is unpaid, the depositary may also refuse to effect any registration, registration of transfer, split-up or combination of deposited securities or withdrawal of deposited securities until such payment is made. If any tax or governmental charge is required to be withheld on any cash distribution, the depositary may deduct the amount required to be withheld from any cash distribution or, in the case of a non-cash distribution, sell the distributed property or securities (by public or private sale) in such amounts and in such manner as the depositary deems necessary and practicable to pay such taxes and distribute any remaining net proceeds or the balance of any such property after deduction of such taxes to the ADR holders entitled thereto.

As an ADR holder or beneficial owner, you will be agreeing to indemnify us, the depositary, its custodian and any of our or their respective officers, directors, employees, agents and affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained.

Reclassifications, Recapitalizations, and Mergers

If we take certain actions that affect the deposited securities, including (i) any change in par value, split-up, consolidation, cancellation or other reclassification of deposited securities or (ii) any distributions of shares or other property not made to holders of ADRs or (iii) any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all of our assets, then the depositary may choose to, and shall if reasonably requested by us:

 

   

amend the form of ADR;

 

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distribute additional or amended ADRs;

 

   

distribute cash, securities or other property it has received in connection with such actions;

 

   

sell any securities or property received and distribute the proceeds as cash; or

 

   

none of the above.

If the depositary does not choose any of the above options, any of the cash, securities or other property it receives will constitute part of the deposited securities and each ADS will then represent a proportionate interest in such property.

Amendment and Termination

How may the deposit agreement be amended?

We may agree with the depositary to amend the deposit agreement and the ADSs without your consent for any reason. ADR holders must be given at least 30 days’ notice of any amendment that imposes or increases any fees or charges (other than stock transfer or other taxes and other governmental charges, transfer or registration fees, SWIFT, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or otherwise prejudices any substantial existing right of ADR holders or beneficial owners. Such notice need not describe in detail the specific amendments effectuated thereby, but must identify to ADR holders and beneficial owners a means to access the text of such amendment. If an ADR holder continues to hold an ADR or ADRs after being so notified, such ADR holder and any beneficial owner are deemed to agree to such amendment and to be bound by the deposit agreement as so amended. No amendment, however, will impair your right to surrender your ADSs and receive the underlying securities, except in order to comply with mandatory provisions of applicable law.

Any amendments or supplements which (i) are reasonably necessary (as agreed by us and the depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act of 1933 or (b) the ADSs or shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by ADR holders, shall be deemed not to prejudice any substantial rights of ADR holders or beneficial owners. Notwithstanding the foregoing, if any governmental body or regulatory body should adopt new laws, rules or regulations which would require amendment or supplement of the deposit agreement or the form of ADR to ensure compliance therewith, we and the depositary may amend or supplement the deposit agreement and the ADR at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the deposit agreement in such circumstances may become effective before a notice of such amendment or supplement is given to ADR holders or within any other period of time as required for compliance.

Notice of any amendment to the deposit agreement or form of ADRs shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the ADR holders identifies a means for ADR holders and beneficial owners to retrieve or receive the text of such amendment (i.e., upon retrieval from the SEC’s, the depositary’s or our website or upon request from the depositary).

How may the deposit agreement be terminated?

The depositary may, and shall at our written direction, terminate the deposit agreement and the ADRs by mailing notice of such termination to the registered holders of ADRs at least 30 days prior to the date fixed in such notice for such termination; provided, however, if the depositary shall have (i) resigned as depositary under the deposit agreement, notice of such termination by the depositary shall not be provided to registered ADR holders unless a successor depositary shall not be operating under the deposit agreement within 60 days of the date of such resignation, and (ii) been removed as depositary under the deposit agreement, notice of such termination by the

 

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depositary shall not be provided to registered holders of ADRs unless a successor depositary shall not be operating under the deposit agreement on the 60th day after our notice of removal was first provided to the depositary.

If the shares are not listed or quoted for trading on a stock exchange or in a securities market as of the date so fixed for termination, then after such date fixed for termination (i) all direct registration ADRs shall cease to be eligible for the direct registration system and shall be considered ADRs issued on the ADR register maintained by the depositary and (ii) the depositary shall use its reasonable efforts to ensure that the ADSs cease to be DTC eligible so that neither DTC nor any of its nominees shall thereafter be a holder of ADRs. At such time as the ADSs cease to be DTC eligible and/or neither DTC nor any of its nominees is a holder of ADRs, the depositary shall (i) instruct its custodian to deliver all shares and/or deposited securities to us along with a general stock power that refers to the names set forth on the ADR register maintained by the depositary and (ii) provide us with a copy of the ADR register maintained by the depositary. Upon receipt of such shares and/or deposited securities and the ADR register maintained by the depositary, we have agreed to use our best efforts to issue to each register ADR holder a share certificate representing the shares represented by the ADSs reflected on the ADR register maintained by the depositary in such registered ADR holder’s name and to deliver such share certificate to the registered ADR holder at the address set forth on the ADR register maintained by the depositary. After providing such instruction to the custodian and delivering a copy of the ADR register to us, the depositary, and its agents will perform no further acts under the deposit agreement or the ADRs and shall cease to have any obligations under the deposit agreement and/or the ADRs. After we receive the copy of the ADR register and the shares and/or deposited securities from the depositary, we shall be discharged from all obligations under the deposit agreement except (i) to distribute the shares to the registered ADR holders entitled thereto and (ii) for its obligations to the depositary and its agents.

If the shares are listed or quoted for trading on a stock exchange or in a securities market as of the date so fixed for termination, then instead of the provisions in the prior paragraph, after the date so fixed for termination, the depositary and its agents will perform no further acts under the deposit agreement or the ADRs, except to receive and hold (or sell) distributions on shares and/or deposited securities and deliver shares and/or deposited securities being withdrawn. As soon as practicable after the date so fixed for termination, the depositary has agreed to use its reasonable efforts to sell the shares and/or deposited securities and shall thereafter (as long as it may lawfully do so) hold in an account (which may be a segregated or unsegregated account) the net proceeds of such sales, together with any other cash then held by it under the deposit agreement, without liability for interest, in trust for the pro rata benefit of the registered ADR holders not theretofore surrendered. After making such sale, the depositary shall be discharged from all obligations in respect of the deposit agreement and the ADRs, except to account for such net proceeds and other cash. After the date so fixed for termination, we shall be discharged from all obligations under the deposit agreement except for our obligations to the depositary and its agents.

Notwithstanding anything to the contrary, in connection with any such termination, the depositary may, in its sole discretion and without notice to us, establish an unsponsored American depositary share program (on such terms as the depositary may determine) for our shares and make available to ADR holders a means to withdraw the shares represented by the ADSs issued under the deposit agreement and to direct the deposit of such shares into such unsponsored American depositary share program, subject, in each case, to receipt by the depositary, at its discretion, of the fees, charges, and expenses provided for under the deposit agreement and the fees, charges, and expenses applicable to the unsponsored American depositary share program.

 

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Limitations on Obligations and Liability to ADR holders

Limits on our obligations and the obligations of the depositary; limits on liability to ADR holders and holders of ADSs

Prior to the issue, registration, registration of transfer, split-up, combination, or cancelation of any ADRs, or the delivery of any distribution in respect thereof, and from time to time in the case of the production of proofs as described below, we or the depositary or its custodian may require:

 

   

payment with respect thereto of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or registration fees in effect for the registration of transfers of shares or other deposited securities upon any applicable register and (iii) any applicable fees and expenses described in the deposit agreement;

 

   

the production of proof satisfactory to it of (i) the identity of any signatory and genuineness of any signature and (ii) such other information, including without limitation, information as to citizenship, residence, exchange control approval, beneficial or other ownership of, or interest in, any securities, compliance with applicable law, regulations, provisions of or governing deposited securities and terms of the deposit agreement and the ADRs, as it may deem necessary or proper; and

 

   

compliance with such regulations as the depositary may establish consistent with the deposit agreement.

The issuance of ADRs, the acceptance of deposits of shares, the registration, registration of transfer, split-up or combination of ADRs or the withdrawal of shares, may be suspended, generally or in particular instances, when the ADR register or any register for deposited securities is closed or when any such action is deemed advisable by the depositary; provided that the ability to withdraw shares may only be limited under the following circumstances: (i) temporary delays caused by closing transfer books of the depositary or our transfer books or the deposit of shares in connection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes, and similar charges, and (iii) compliance with any laws or governmental regulations relating to ADRs or to the withdrawal of deposited securities.

The deposit agreement expressly limits the obligations and liability of the depositary, ourselves and our respective agents, provided, however, that no disclaimer of liability under the Securities Act of 1933 is intended by any of the limitations of liabilities provisions of the deposit agreement. The deposit agreement provides that each of us, the depositary and our respective agents will:

 

   

incur or assume no liability (including, without limitation, to holders or beneficial owners) if any present or future law, rule, regulation, fiat, order or decree of the Cayman Islands, Hong Kong, the United States or any other country or jurisdiction, or of any governmental or regulatory authority or securities exchange or market or automated quotation system, the provisions of or governing any deposited securities, any present or future provision of our charter, any act of God, war, terrorism, epidemic, pandemic, nationalization, expropriation, currency restrictions, work stoppage, strike, civil unrest, revolutions, rebellions, explosions, computer failure, or circumstance beyond our, the depositary’s, or our respective agents’ direct and immediate control shall prevent or delay, or shall cause any of them to be subject to any civil or criminal penalty in connection with, any act which the deposit agreement or the ADRs provide shall be done or performed by us, the depositary or our respective agents (including, without limitation, voting);

 

   

incur or assume no liability (including, without limitation, to holders or beneficial owners) by reason of any non-performance or delay, caused as aforesaid, in the performance of any act or things which by the terms of the deposit agreement it is provided shall or may be done or performed or any exercise or failure to exercise discretion under the deposit agreement or the ADRs including, without limitation, any failure to determine that any distribution or action may be lawful or reasonably practicable;

 

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incur or assume no liability (including, without limitation, to holders or beneficial owners) if it performs its obligations under the deposit agreement and ADRs without gross negligence or willful misconduct;

 

   

in the case of the depositary and its agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities the ADSs or the ADRs;

 

   

in the case of us and our agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities the ADSs or the ADRs, which in our or our agents’ opinion, as the case may be, may involve it in expense or liability, unless indemnity satisfactory to us or our agent, as the case may be against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be requested;

 

   

not be liable (including, without limitation, to holders or beneficial owners) for any action or inaction by it in reliance upon the advice of or information from any legal counsel, any accountant, any person presenting shares for deposit, any registered holder of ADRs, or any other person believed by it to be competent to give such advice or information and/or, in the case of the depositary, us; or

 

   

may rely and shall be protected in acting upon any written notice, request, direction, instruction or document believed by it to be genuine and to have been signed, presented or given by the proper party or parties.

Neither the depositary nor its agents have any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities, the ADSs or the ADRs. We and our agents shall only be obligated to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities, the ADSs or the ADRs, which in our opinion may involve us in expense or liability, if indemnity satisfactory to us against all expense (including fees and disbursements of counsel) and liability is furnished as often as may be required. The depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the deposit agreement, any registered holder or holders of ADRs, any ADRs or otherwise related to the deposit agreement or ADRs to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators. The depositary shall not be liable for the acts or omissions made by, or the insolvency of, any securities depository, clearing agency or settlement system. Furthermore, the depositary shall not be responsible for, and shall incur no liability in connection with or arising from, the insolvency of any custodian that is not a branch or affiliate of JPMorgan. Notwithstanding anything to the contrary contained in the deposit agreement or any ADRs, the depositary shall not be responsible for, and shall incur no liability in connection with or arising from, any act or omission to act on the part of the custodian except to the extent that any registered ADR holder has incurred liability directly as a result of the custodian having (i) committed fraud or willful misconduct in the provision of custodial services to the depositary or (ii) failed to use reasonable care in the provision of custodial services to the depositary as determined in accordance with the standards prevailing in the jurisdiction in which the custodian is located. The depositary and the custodian(s) may use third party delivery services and providers of information regarding matters such as, but not limited to, pricing, proxy voting, corporate actions, class action litigation, and other services in connection with the ADRs and the deposit agreement, and use local agents to provide services such as, but not limited to, attendance at any meetings of security holders of issuers. Although the depositary and the custodian will use reasonable care (and cause their agents to use reasonable care) in the selection and retention of such third party providers and local agents, they will not be responsible for any errors or omissions made by them in providing the relevant information or services. The depositary shall not have any liability for the price received in connection with any sale of securities, the timing thereof or any delay in action or omission to act nor shall it be responsible for any error or delay in action, omission to act, default or negligence on the part of the party so retained in connection with any such sale or proposed sale.

The depositary has no obligation to inform ADR holders or beneficial owners about the requirements of the laws, rules or regulations or any changes therein or thereto of the Cayman Islands, Hong Kong, the United States or

 

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any other country or jurisdiction or of any governmental or regulatory authority or any securities exchange or market or automated quotation system.

Additionally, none of the depositary, the custodian or us, or any of their or our respective directors, officers, employees, agents or affiliates shall be liable for the failure by any registered holder of ADRs or beneficial owner therein to obtain the benefits of credits or refunds of non-U.S. tax paid against such ADR holder’s or beneficial owner’s income tax liability. The depositary is under no obligation to provide the ADR holders and beneficial owners, or any of them, with any information about our tax status. Neither the depositary or us shall incur any liability for any tax or tax consequences that may be incurred by registered ADR holders or beneficial owners on account of their ownership or disposition of ADRs or ADSs.

Neither the depositary nor its agents will be responsible for any failure to carry out any instructions to vote any of the deposited securities, for the manner in which any voting instructions are given or deemed to be given pursuant to the terms of the deposit agreement, including instructions to give a discretionary proxy to a person designated by us, for the manner in which any vote is cast, including, without limitation, any vote cast by a person to whom the depositary is instructed to grant a discretionary proxy (or deemed to have been instructed pursuant to the terms of the deposit agreement), or for the effect of any such vote. The depositary may rely upon instructions from us or our counsel in respect of any approval or license required for any currency conversion, transfer or distribution. The depositary shall not incur any liability for the content of any information submitted to it by us or on our behalf for distribution to ADR holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the deposited securities, for the validity or worth of the deposited securities, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of the deposit agreement or for the failure or timeliness of any notice from us. The depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the depositary or in connection with any matter arising wholly after the removal or resignation of the depositary. Neither the depositary nor any of its agents shall be liable for any indirect, special, punitive or consequential damages (including, without limitation, legal fees and expenses) or lost profits, in each case of any form incurred by any person or entity (including, without limitation holders or beneficial owners of ADRs and ADSs), whether or not foreseeable and regardless of the type of action in which such a claim may be brought.

In the deposit agreement each party thereto (including, for avoidance of doubt, each ADR holder and beneficial owner) irrevocably waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any suit, action or proceeding against the depositary and/or us directly or indirectly arising out of or relating to the shares or other deposited securities, the ADSs or the ADRs, the deposit agreement or any transaction contemplated therein, or the breach thereof (whether based on contract, tort, common law or any other theory). No provision of the deposit agreement or the ADRs is intended to constitute a waiver or limitation of any rights which an ADR holder or any beneficial owner may have under the Securities Act of 1933 or the Securities Exchange Act of 1934, to the extent applicable.

The depositary and its agents may own and deal in any class of securities of our company and our affiliates and in ADRs.

Disclosure of Interest in ADSs

To the extent that the provisions of or governing any deposited securities may require disclosure of or impose limits on beneficial or other ownership of, or interest in, deposited securities, other shares and other securities and may provide for blocking transfer, voting or other rights to enforce such disclosure or limits, you as ADR holders or beneficial owners agree to comply with all such disclosure requirements and ownership limitations and to comply with any reasonable instructions we may provide in respect thereof. We reserve the right to instruct you to deliver your ADSs for cancellation and withdrawal of the deposited securities so as to permit us to deal with you directly as a holder of shares and, by holding an ADS or an interest therein, you and beneficial owners will be agreeing to comply with such instructions.

 

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Books of Depositary

The depositary or its agent will maintain a register for the registration, registration of transfer, combination, and split-up of ADRs, which register shall include the depositary’s direct registration system. Registered holders of ADRs may inspect such records at the depositary’s office at all reasonable times, but solely for the purpose of communicating with other ADR holders in the interest of the business of our company or a matter relating to the deposit agreement. Such register may be closed at any time or from time to time, when deemed expedient by the depositary.

The depositary will maintain facilities for the delivery and receipt of ADRs.

Appointment

In the deposit agreement, each registered holder of ADRs and each beneficial owner, upon acceptance of any ADSs or ADRs (or any interest in any of them) issued in accordance with the terms and conditions of the deposit agreement will be deemed for all purposes to:

 

   

be a party to and bound by the terms of the deposit agreement and the applicable ADR or ADRs,

 

   

appoint the depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the deposit agreement and the applicable ADR or ADRs, to adopt any and all procedures necessary to comply with applicable laws and to take such action as the depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the deposit agreement and the applicable ADR and ADRs, the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof; and

 

   

acknowledge and agree that (i) nothing in the deposit agreement or any ADR shall give rise to a partnership or joint venture among the parties thereto, nor establish a fiduciary or similar relationship among such parties, (ii) the depositary, its divisions, branches and affiliates, and their respective agents, may from time to time be in the possession of non-public information about us, ADR holders, beneficial owners and/or their respective affiliates, (iii) the depositary and its divisions, branches and affiliates may at any time have multiple banking relationships with us, ADR holders, beneficial owners and/or the affiliates of any of them, (iv) the depositary and its divisions, branches and affiliates may, from time to time, be engaged in transactions in which parties adverse to us, ADR holders, beneficial owners and/or their respective affiliates may have interests, (v) nothing contained in the deposit agreement or any ADR(s) shall (A) preclude the depositary or any of its divisions, branches or affiliates from engaging in any such transactions or establishing or maintaining any such relationships, or (B) obligate the depositary or any of its divisions, branches or affiliates to disclose any such transactions or relationships or to account for any profit made or payment received in any such transactions or relationships, (vi) the depositary shall not be deemed to have knowledge of any information held by any branch, division or affiliate of the depositary and (vii) notice to an ADR holder shall be deemed, for all purposes of the deposit agreement and the ADRs, to constitute notice to any and all beneficial owners of the ADSs evidenced by such ADR holder’s ADRs. For all purposes under the deposit agreement and the ADRs, the ADR holders thereof shall be deemed to have all requisite authority to act on behalf of any and all beneficial owners of the ADSs evidenced by such ADRs.

Governing Law

The deposit agreement, the ADSs and the ADRs are governed by and construed in accordance with the internal laws of the State of New York. In the deposit agreement, we have submitted to the non-exclusive jurisdiction of the courts of the State of New York and appointed an agent for service of process on our behalf. Any action based on the deposit agreement, the ADSs, the ADRs or the transactions contemplated therein or thereby may also be instituted by the depositary against us in any competent court in the Cayman Islands, Hong Kong, the United States and/or any other court of competent jurisdiction.

 

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Under the deposit agreement, by holding or owning an ADR or ADS or an interest therein, ADR holders and beneficial owners each irrevocably agree that any legal suit, action or proceeding against or involving us or the depositary, regardless of whether such legal suit, action or proceeding also involves parties other than us or the depositary, arising out of or related in any way to the deposit agreement, the ADSs, the ADRs or the transactions contemplated thereby or by virtue of ownership thereof, including without limitation claims under the Securities Act, may only be instituted in the United States District Court for the Southern District of New York (or, in the state courts of New York County, New York if either (i) the United States District Court for the Southern District of New York lacks jurisdiction, or (ii) the designation of the United States District Court for the Southern District of New York as the exclusive forum is, or becomes, invalid, illegal or unenforceable), irrevocably waive any objection which you may have to the laying of venue of any such proceeding, and irrevocably submit to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Notwithstanding the foregoing or anything in the deposit agreement to the contrary, subject to the federal securities law carve-out as set out therein, the depositary may refer any such suit, action or proceeding to arbitration in accordance with the provisions of the deposit agreement and, upon such referral, any such suit, action or proceeding instituted by ADR holders and beneficial owners shall be finally decided in such arbitration or proceeding instituted by ADR holders and beneficial owners shall be finally decided in such arbitration rather than in such court.

Notwithstanding the foregoing, (i) the depositary may, in its sole discretion, elect to institute any dispute, suit, action, controversy, claim or proceeding directly or indirectly based on, arising out of or relating to the deposit agreement, the ADSs, the ADRs or the transactions contemplated therein or thereby, including without limitation any question regarding its or their existence, validity, interpretation, performance or termination, against any other party or parties to the deposit agreement (including, without limitation, against ADR holders and beneficial owners of interests in ADSs), by having the matter referred to and finally resolved by an arbitration conducted under the terms described below, and (ii) the depositary may in its sole discretion require, by written notice to the relevant party or parties, that any dispute, suit, action, controversy, claim or proceeding against the depositary by any party or parties to the deposit agreement (including, without limitation, by ADR holders and beneficial owners of interests in ADSs) shall be referred to and finally settled by an arbitration conducted under the terms described below. Any such arbitration shall be conducted in the English language either in New York, New York in accordance with the Commercial Arbitration Rules of the American Arbitration Association or in Hong Kong following the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL).

Jury Trial Waiver

In the deposit agreement, each party thereto (including, for the avoidance of doubt, each holder and beneficial owner of, and/or holder of interests in, ADSs or ADRs) irrevocably waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any suit, action or proceeding against the depositary and/or us directly or indirectly arising out of, based on or relating in any way to the shares or other deposited securities, the ADSs or the ADRs, the deposit agreement or any transaction contemplated therein, or the breach thereof (whether based on contract, tort, common law or any other theory), including any claim under the U.S. federal securities laws.

If we or the depositary were to oppose a jury trial demand based on such waiver, the court would determine whether the waiver was enforceable in the facts and circumstances of that case in accordance with applicable state and federal law, including whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. The waiver to right to a jury trial in the deposit agreement is not intended to be deemed a waiver by any holder or beneficial owner of ADSs of our or the depositary’s compliance with the U.S. federal securities laws and the rules and regulations promulgated thereunder.

Jurisdiction

We have agreed with the depositary that the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction

 

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over a particular dispute, state courts in New York County, New York) shall have non-exclusive jurisdiction to hear and determine any suit, action, or proceeding and to settle any dispute between the depositary bank and us that does not involve any other person or party that may arise out of or relate in any way to the deposit agreement, including claims under the Securities Act or the Exchange Act.

The deposit agreement provides that, by holding or owning an ADR or ADS or an interest therein, ADR holders and beneficial owners each irrevocably agree that any legal suit, action or proceeding against or involving us or the depositary, regardless of whether such legal suit, action or proceeding also involves parties other than us or the depositary, arising out of or related in any way to the deposit agreement, the ADSs, the ADRs or the transactions contemplated thereby or by virtue of ownership thereof, including without limitation claims under the Securities Act, may only be instituted in the United States District Court for the Southern District of New York (or, in the state courts of New York County, New York if either (i) the United States District Court for the Southern District of New York lacks jurisdiction, or (ii) the designation of the United States District Court for the Southern District of New York as the exclusive forum is, or becomes, invalid, illegal or unenforceable), irrevocably waive any objection which you may have to the laying of venue of any such proceeding, and irrevocably submit to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

 

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SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, we will have 18,772,000 ADSs outstanding, representing 100.0% of our outstanding Class A ordinary shares, assuming the underwriters do not exercise their over-allotment option to purchase additional ADSs.

All of the ADSs sold in this offering will be freely transferable in the United States by persons other than our “affiliates” without restriction or further registration under the Securities Act. Rule 144 of the Securities Act defines an “affiliate” of a company as a person that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, our Company. All of our ordinary shares outstanding immediately prior to the completion of this offering are “restricted securities” as that term is defined in Rule 144 because they were issued in a transaction or series of transactions not involving a public offering. Restricted securities, in the form of ADSs or otherwise, may be sold only if they are the subject of an effective registration statement under the Securities Act or if they are sold pursuant to an exemption from the registration requirement of the Securities Act such as those provided for in Rules 144 or 701 promulgated under the Securities Act, which rules are summarized below. Restricted shares may also be sold outside of the United States to non-U.S. persons in accordance with Rule 904 of Regulation S under the Act. This prospectus may not be used in connection with any resale of our ADSs acquired in this offering by our affiliates.

Sales of substantial amounts of our ADSs in the public market could adversely affect prevailing market prices of our ADSs. Prior to this offering, there has been no public market for our shares or ADSs, and while we intend to apply for the listing of our ADSs on the NYSE, we cannot assure you that a regular trading market will develop in the ADSs. We do not expect that a trading market will develop for our ordinary shares not represented by ADSs.

Lock-Up Agreements

We have agreed, for a period of 180 days after the date of this prospectus, subject to certain exceptions (including the potential issuance of warrants to Airbnb) not to (1) offer, sell, issue, pledge, contract to sell, contract to purchase, grant any option, right or warrant to purchase, lend, make any short sale or otherwise transfer or dispose of, directly or indirectly, any ADSs or ordinary shares or any other securities so owned convertible into or exercisable or exchangeable for ADSs or ordinary shares, (2) enter into any swap, hedge or any other agreement that transfers, in whole or in part, the economic consequences of ownership of the ADSs or ordinary shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of ADSs, ordinary shares or such other securities, in cash or otherwise, or (3) file any registration statement with the Securities and Exchange Commission relating to the offering of any ADSs or ordinary shares or any securities convertible into or exercisable or exchangeable for ADSs or ordinary shares, or publicly disclose the intention to take any such action.

Furthermore, each of our directors, executive officers and our Principal Shareholder has also entered into a similar lock-up agreement for a period of 180 days from the date of this prospectus, subject to certain exceptions, with respect to our ordinary shares, ADSs and securities that are substantially similar to our ordinary shares or ADSs. Our Principal Shareholder owns all of our ordinary shares outstanding immediately prior to this offering.

Other than this offering, we are not aware of any plans by our Principal Shareholder to dispose of significant numbers of our ADSs or ordinary shares. However, our Principal Shareholder or owners of securities convertible or exchangeable into or exercisable for our ADSs or ordinary shares may dispose of significant numbers of our ADSs or ordinary shares in the future. We cannot predict what effect, if any, future sales of our ADSs or ordinary shares, or the availability of ADSs or ordinary shares for future sale, will have on the trading price of our ADSs from time to time. Sales of substantial amounts of our ADSs or ordinary shares in the public market, or the perception that these sales could occur, could adversely affect the trading price of our ADSs.

 

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Rule 144

In general, under Rule 144 as currently in effect, once we have been subject to the public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, persons who are not our affiliates and have beneficially owned our Class A ordinary shares, including our ADSs, for more than six months but not more than one year may sell such Class A ordinary shares, including our ADSs, without registration under the Securities Act subject to the availability of current public information about us. Persons who are not our affiliates and have beneficially owned our Class A ordinary shares, including our ADSs, for more than one year may freely sell our Class A ordinary shares, including our ADSs, without registration under the Securities Act. Persons who are our affiliates (including persons beneficially owning 10% or more of our outstanding shares), and have beneficially owned our Class A ordinary shares for at least six months, may sell within any three-month period a number of restricted securities that does not exceed the greater of the following:

 

   

1.0% of the then outstanding ordinary shares of the same class, in the form of ADSs or otherwise, which immediately after this offering will equal 187,720 ordinary shares, assuming the underwriters do not exercise their over-allotment option; or

 

   

the average weekly trading volume of our ordinary shares of the same class, in the form of ADSs or otherwise, during the four calendar weeks preceding the date on which notice of the sale on Form 144 is filed with the SEC by such person.

Such sales are also subject to manner-of-sale provisions, notice requirements and the availability of current public information about us. In addition, in each case, these shares would remain subject to lock-up arrangements and would only become eligible for sale when the lock-up period expires.

Rule 701

Beginning 90 days after the date of this prospectus, persons other than affiliates who purchased ordinary shares under a written compensatory plan or contract may be entitled to sell such shares in the United States in reliance on Rule 701 under the Securities Act. Rule 701 permits affiliates to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. Rule 701 further provides that non-affiliates may sell these shares in reliance on Rule 144 subject only to its manner-of-sale requirements. However, the Rule 701 shares would remain subject to any applicable lock-up arrangements and would only become eligible for sale when the lock-up period expires.

 

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EXPENSES RELATED TO THIS OFFERING

Set forth below is an itemization of the total expenses, excluding underwriting discounts, which are expected to be incurred by us in connection with the offer and sale of the ADSs by us. With the exception of the SEC registration fee, the Financial Industry Regulatory Authority, or FINRA, filing fee, and the NYSE market entry and listing fee, all amounts are estimates.

 

SEC Registration Fee

   US$ 42,395  

FINRA Filing Fee

   US$ 58,787  

NYSE Market Entry and Listing Fee

   US$ 175,000  

Printing and engraving expenses

   US$ 205,000  

Legal fees and expenses

   US$ 1,812,534  

Accounting fees and expenses

   US$ 449,982  

Miscellaneous

   US$ 831,428  
  

 

 

 

Total

   US$ 3,575,126  
  

 

 

 

These expenses will be borne by us. The underwriters have agreed to reimburse us for a portion of our expenses in connection with the offering.

 

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MATERIAL TAX CONSIDERATIONS

The following summary of certain Cayman Islands and U.S. federal income tax consequences of an investment in our ordinary shares and ADSs and is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in the ADSs or our ordinary shares, such as the tax consequences under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands and the United States. You are encouraged to consult your own tax advisors concerning the overall tax consequences arising in your own particular situation under U.S. federal, state, local or foreign law of the ownership of our ordinary shares. To the extent that this discussion relates to matters of Cayman Islands tax law, it is the opinion of Maples and Calder (Hong Kong) LLP, our counsel as to Cayman Islands law.

Cayman Islands Tax Considerations

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our Company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

We have received an undertaking from the Governor in Cabinet of the Cayman Islands to the effect that, for a period of 20 years from the date of the undertaking, no law that thereafter is enacted in the Cayman Islands imposing any tax or duty to be levied on profits, income or on gains or appreciation shall apply to our Company or its operations; and that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable (a) on or in respect of the shares, debentures or other obligations of our Company; or (b) by way of the withholding in whole or in part of any relevant payment as defined in the Tax Concessions Law of the Cayman Islands.

Payments of dividends and capital in respect of our ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares, nor will gains derived from the disposal of our ordinary shares be subject to Cayman Islands income or corporation tax.

No stamp duty is payable in respect of the issue of our ordinary shares or on an instrument of transfer in respect of our ordinary shares.

United States Federal Income Tax Considerations

The following discussion is a summary of U.S. federal income tax considerations generally applicable to the ownership and disposition of our ADSs and ordinary shares by U.S. Holders (as defined below) that acquire our ADSs in this offering and hold our ADSs as “capital assets” (generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended (the “Code”). This discussion is based upon existing United States federal income tax law which is subject to differing interpretations or change, possibly with retroactive effect. There can be no assurance that the Internal Revenue Service, or the IRS, or a court will not take a contrary position. This discussion does not address all aspects of United States federal income taxation that may be relevant to particular investors in light of their specific circumstances, including investors subject to special tax rules (for example, certain financial institutions (including banks), cooperatives, pension plans, insurance companies, broker-dealers, traders in securities that have elected the mark-to-market method of accounting for their securities, partnerships and their partners, regulated investment companies, real estate investment trusts, and tax-exempt organizations (including private foundations)), investors who are not U.S. Holders, investors who own (directly, indirectly, or constructively) 10% or more of our stock (by vote or value),

 

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investors that will hold their ADSs or ordinary shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for United States federal income tax purposes, or U.S. Holders that have a functional currency other than the U.S. dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this discussion does not discuss any non-United States tax, state or local tax, or non-income tax (such as the U.S. federal gift or estate tax) considerations, or any consequences under the alternative minimum tax or Medicare tax on net investment income. Each U.S. Holder is urged to consult its tax advisor regarding the United States federal, state, local, and non-United States income and other tax considerations of an investment in our ADSs or ordinary shares.

General

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of our ADSs or ordinary shares that is, for United States federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a United States person under the Code.

If a partnership (or other entity or arrangement treated as a partnership for United States federal income tax purposes) is a beneficial owner of our ADSs or ordinary shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding our ADSs or ordinary shares and partners in such partnerships are urged to consult their tax advisors as to the particular United States federal income tax consequences of an investment in our ADSs or ordinary shares.

For U.S. federal income tax purposes, it is generally expected that a U.S. Holder of ADSs will be treated as the beneficial owner of the underlying shares represented by the ADSs. The remainder of this discussion assumes that a U.S. Holder of our ADSs will be treated in this manner. Accordingly, deposits or withdrawals of ordinary shares for ADSs will generally not be subject to U.S. federal income tax.

Dividends

The entire amount of any cash distribution paid with respect to our ADSs or ordinary shares (including the amount of any non-U.S. taxes withheld therefrom, if any) generally will constitute dividends to the extent such distributions are paid out of our current or accumulated earnings and profits, as determined under United States federal income tax principles, and generally will be taxed as ordinary income in the year received by the depositary, in the case of ADSs, or on the date of receipt by such U.S. Holder, in the case of ordinary shares. To the extent amounts paid as distributions on the ADSs or ordinary shares exceed our current or accumulated earnings and profits, such distributions will not be dividends, but instead will be treated first as a tax-free return of capital to the extent of the U.S. Holder’s adjusted tax basis in the ADSs or ordinary shares with respect to which the distribution is made, and thereafter as capital gain. However, we do not intend to compute (or to provide U.S. Holders with the information necessary to compute) our earnings and profits under United States federal income tax principles. Accordingly, a U.S. Holder will be unable to establish that a distribution is not out of earnings and profits and should expect to treat the full amount of the distribution as a “dividend” for United States federal income tax purposes.

Dividends will generally be treated as income from foreign sources for United States foreign tax credit purposes and will generally constitute passive category income. Depending on the U.S. Holder’s particular facts and circumstances, a U.S. Holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any foreign withholding taxes imposed (at a rate not exceeding any applicable treaty rate) on dividends received on our ADSs or ordinary shares. A U.S. Holder who does not elect to claim a foreign tax

 

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credit for foreign tax withheld may instead claim a deduction, for United States federal income tax purposes, in respect of such withholdings, but only for a year in which such U.S. Holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex. U.S. Holders are advised to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Dividends paid in non-U.S. currency will be included in the gross income of a U.S. Holder in a U.S. dollar amount calculated by reference to a spot market exchange rate in effect on the date that the dividends are received by the U.S. Holder, regardless of whether such foreign currency is in fact converted into U.S. dollars on such date. Such U.S. Holder will have a tax basis for United States federal income tax purposes in the foreign currency received equal to that U.S. dollar value. If such dividends are converted into U.S. dollars on the date of receipt, a U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect thereof. If the foreign currency so received is not converted into U.S. dollars on the date of receipt, such U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any gain or loss on a subsequent conversion or other disposition of the foreign currency generally will be treated as ordinary income or loss to such U.S. Holder and generally will be income or loss from sources within the United States for foreign tax credit limitation purposes. U.S. Holders should consult their own tax advisors regarding the treatment of foreign currency gain or loss, if any, on any foreign currency received by a U.S. Holder that are converted into U.S. dollars on a date subsequent to receipt.

Sale or Other Disposition of ADSs or Ordinary Shares

A U.S. Holder will generally recognize capital gain or loss upon a sale or other disposition of ADSs or ordinary shares, in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted tax basis in such ADSs or ordinary shares, each amount determined in U.S. dollars. Any capital gain or loss will be long-term capital gain or loss if the ADSs or ordinary shares have been held for more than one year and will generally be United States source gain or loss for United States foreign tax credit purposes. The deductibility of a capital loss may be subject to limitations. Each U.S. Holder is advised to consult its tax advisor regarding the tax consequences if a foreign tax is imposed on a disposition of our ADSs or ordinary shares, including the availability of the foreign tax credit under its particular circumstances.

A U.S. Holder that receives Singapore dollars or another currency other than U.S. dollars on the disposition of our ADSs or ordinary shares will realize an amount equal to the U.S. dollar value of the non-U.S. currency received at the spot rate on the date of sale (or, if the ADSs or ordinary shares are traded on a recognized exchange and in the case of cash basis and electing accrual basis U.S. Holders, the settlement date). An accrual basis U.S. Holder that does not elect to determine the amount realized using the spot rate on the settlement date will recognize foreign currency gain or loss equal to the difference between the U.S. dollar value of the amount received based on the spot market exchange rates in effect on the date of sale or other disposition and the settlement date. A U.S. Holder will have a tax basis in the currency received equal to the U.S. dollar value of the currency received on the settlement date. Any gain or loss on a subsequent disposition or conversion of the currency will be United States source ordinary income or loss.

Passive Foreign Investment Company Considerations

For United States federal income tax purposes, a non-United States corporation, such as our Company, will be treated as a “passive foreign investment company,” or “PFIC” if, in the case of any particular taxable year, either (a) 75% or more of our gross income for such year consists of certain types of “passive” income or (b) 50% or more of the value of our assets (generally determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. Based upon our current and expected income and assets (including goodwill and taking into account the expected proceeds from this offering) and the expected market price of our ADSs following this offering, we do not expect to be a PFIC for the current taxable year or the foreseeable future.

 

 

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However, while we do not expect to be or become a PFIC, no assurance can be given in this regard because the determination of whether we are or will become a PFIC for any taxable year is a fact-intensive inquiry made annually that depends, in part, upon the composition and classification of our income and assets. Fluctuations in the market price of our ADSs may cause us to be or become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test, including the value of our goodwill and other unbooked intangibles, may be determined by reference to the market price of our ADSs (which may be volatile). The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in this offering. It is also possible that the Internal Revenue Service may challenge our classification of certain income or assets or the valuation of our goodwill and other unbooked intangibles, which may result in our company being or becoming a PFIC for the current or future taxable years.

If we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares, and unless the U.S. Holder makes a mark-to-market election (as described below), the U.S. Holder will generally be subject to special tax rules on (i) any excess distribution that we make to the U.S. Holder (which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than 125% of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. Holder’s holding period for the ADSs or ordinary shares), and (ii) any gain realized on the sale or other disposition, including, under certain circumstances, a pledge, of ADSs or ordinary shares. Under the PFIC rules:

 

   

such excess distribution and/or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares;

 

   

such amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are a PFIC, each a pre-PFIC year, will be taxable as ordinary income;

 

   

such amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect applicable to the U.S. Holder for that year; and

 

   

an interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year.

If we are a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares and we own any equity in a non-United States entity that is also a PFIC, or a lower-tier PFIC, such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. U.S. Holders are advised to consult their tax advisors regarding the application of the PFIC rules to any of the entities in which we may own equity.

As an alternative to the foregoing rules, a U.S. Holder of “marketable stock” in a PFIC may make a mark-to-market election with respect to such stock, provided that certain requirements are met. The mark-to-market election is available only for stock that is regularly traded on a national securities exchange that is registered with the SEC, or on a foreign exchange or market that the IRS determines is a qualified exchange that has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. Although we intend to apply for the listing of our ADSs on the NYSE, we cannot guarantee that our listing will be approved. Furthermore, we cannot guarantee that, once listed, our ADSs will continue to be listed and regularly traded on such exchange. U.S. Holders are advised to consult their tax advisors as to whether the ADSs are considered marketable for these purposes.

If an effective mark-to-market election is made with respect to our ADSs or ordinary shares, the U.S. Holder will generally (i) include as ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of ADSs or ordinary shares held at the end of the taxable year over its adjusted tax basis of such ADSs or ordinary shares and (ii) deduct as an ordinary loss the excess, if any, of its adjusted tax basis of the ADSs or ordinary shares held at the end of the taxable year over the fair market value of such ADSs or ordinary shares held at the end of the taxable year, but only to the extent of the net amount previously included in income

 

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as a result of the mark-to-market election. The U.S. Holder’s adjusted tax basis in the ADSs or ordinary shares would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. Holder makes an effective mark-to-market election, in each year that we are a PFIC any gain recognized upon the sale or other disposition of the ADSs or ordinary shares will be treated as ordinary income and loss will be treated as ordinary loss, but only to the extent of the net amount previously included in income as a result of the mark-to-market election.

If a U.S. Holder makes a mark-to-market election in respect of a PFIC and such corporation ceases to be a PFIC, the U.S. Holder will not be required to take into account the mark-to-market gain or loss described above during any period that such corporation is not a PFIC.

Because a mark-to-market election generally cannot be made for any lower-tier PFICs that a PFIC may own, a U.S. Holder who makes a mark-to-market election with respect to our ADSs or ordinary shares may continue to be subject to the general PFIC rules with respect to such U.S. Holder’s indirect interest in any of our non-United States subsidiaries if any of them is a PFIC.

We do not intend to provide information necessary for U.S. Holders to make qualified electing fund elections, which, if available, would result in tax treatment different from (and generally less adverse than) the general tax treatment for PFICs described above.

If a U.S. Holder owns our ADSs or ordinary shares during any taxable year that we are a PFIC, such holder would generally be required to file an annual IRS Form 8621. Each U.S. Holder is advised to consult its tax advisor regarding the potential tax consequences to such holder if we are or become a PFIC, including the possibility of making a mark-to-market election.

THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH PROSPECTIVE INVESTOR IN THE OUR ADSS IS URGED TO CONSULT ITS OWN TAX ADVISER ABOUT THE TAX CONSEQUENCES TO IT OF OWNING AND DISPOSING OF OUR ADSS OR ORDINARY SHARES IN LIGHT OF SUCH PROSPECTIVE INVESTOR’S OWN CIRCUMSTANCES.

 

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UNDERWRITING—CONFLICT OF INTEREST

We and the underwriters named below have entered into an underwriting agreement with respect to the ADSs being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of ADSs indicated in the following table. Goldman Sachs & Co. LLC and Credit Suisse Securities (USA) LLC are the representatives of the underwriters.

 

Underwriters

   Number of ADSs  

Goldman Sachs & Co. LLC

                   

Credit Suisse Securities (USA) LLC

                   

Total

     18,772,000  

The underwriters are committed to take and pay for all of the ADSs being offered, if any are taken, other than the ADSs covered by the option described below unless and until this option is exercised.

The underwriters have an option to buy up to an additional 2,815,800 ADSs in this offering to cover sales by the underwriters of a greater number of ADSs than the total number set forth in the table above. They may exercise that option for 30 days. If any ADSs are purchased pursuant to this option, the underwriters will severally purchase ADSs in approximately the same proportion as set forth in the table above.

The following table shows the per ADS and total underwriting discounts and commissions to be paid to the underwriters by us. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase 2,815,800 additional ADSs.

 

Paid by Us

   No Exercise      Full Exercise  

Per ADS

                                       

Total

                                       

We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $3,575,126. The underwriters have agreed to reimburse us for a portion of our expenses in connection with the offering and certain other non-offering related expenses incurred by us.

A prospectus in electronic format may be made available on the web sites maintained by one or more underwriters, or selling group members, if any, participating in the offering. The underwriters may agree to allocate a number of ADSs to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters and selling group members that may make Internet distributions on the same basis as other allocations.

ADSs sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any ADSs sold by the underwriters to securities dealers may be sold at a discount of up to $             per ADS from the initial public offering price. After the initial offering of the ADSs, the representatives may change the offering price and the other selling terms. Sales of ADSs made outside of the United States may be made by affiliates of the underwriters. The offering of the ADSs by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

We and our executive officers, directors, and holders of substantially all of our common stock and securities convertible into or exchangeable for our common stock have agreed or will agree with the underwriters, subject to certain exceptions, not to dispose of or hedge any of our or their common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Goldman Sachs & Co. LLC and Credit Suisse Securities (USA) LLC. See the section titled “Shares Eligible for Future Sale” for a discussion of certain transfer restrictions.

 

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Prior to the offering, there has been no public market for the ADSs. Neither we nor the underwriters can assure investors that an active trading market will develop for the ADSs or that the ADSs will trade in the public market at or above the initial public offering price.

We have made an application to list our ADSs on the NYSE under the symbol “TDCX.”

In connection with the offering, the underwriters may purchase and sell ADSs in the open market. These transactions may include short sales, stabilizing transactions, and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of ADSs than they are required to purchase in the offering, and a short position represents the amount of such sales that have not been covered by subsequent purchases. A “covered short position” is a short position that is not greater than the amount of additional ADSs for which the underwriters’ option described above may be exercised. The underwriters may cover any covered short position by either exercising their option to purchase additional ADSs or purchasing ADSs in the open market. In determining the source of ADSs to cover the covered short position, the underwriters will consider, among other things, the price of ADSs available for purchase in the open market as compared to the price at which they may purchase additional ADSs pursuant to the option described above. “Naked” short sales are any short sales that create a short position greater than the amount of additional ADSs for which the option described above may be exercised. The underwriters must cover any such naked short position by purchasing ADSs in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the ADSs in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of ADSs made by the underwriters in the open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased ADSs sold by or for the account of such underwriter in stabilizing or short covering transactions.

Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of our ADSs, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of our ADSs. As a result, the price of our ADSs may be higher than the price that otherwise might exist in the open market. The underwriters are not required to engage in these activities and may end any of these activities at any time. These transactions may be effected on the NYSE, in the over-the-counter market or otherwise.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to us and to persons and entities with relationships with us, for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the underwriters and their respective affiliates, officers, directors, and employees may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps, and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities, or instruments of the issuer (directly, as collateral securing other obligations or otherwise) or persons and entities with relationships with the issuer. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas or publish or express independent research views in respect of such assets, securities, or instruments and may at any time hold, or recommend to clients that they should acquire, long or short positions in such assets, securities, and instruments.

 

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The address of Goldman Sachs & Co. LLC is 200 West Street, New York, New York 10282. The address of Credit Suisse Securities (USA) LLC is Eleven Madison Avenue, New York, New York 10010.

Certain affiliates and other persons and entities associated with our Founder and certain of our directors and officers have indicated interests in purchasing an aggregate amount not to exceed 2% of the ADSs being offered in this offering at the initial public offering price and on the same terms as the other ADSs being offered. Such indications of interests are not binding agreements or obligations to purchase, and we and the underwriters are under no obligations to sell any ADSs to such persons. Any ADSs purchased by our executive officers or directors in the offering will be subject to the lock-up agreements with the underwriters described above.

Conflict of Interest

Because an affiliate of Credit Suisse Securities (USA) LLC, which is an underwriter in this offering, is the lender under the Credit Suisse Facility and will receive 5% or more of the net proceeds from this offering due to the repayment of the Credit Suisse Facility, Credit Suisse Securities (USA) LLC is deemed to have a conflict of interest within the meaning of FINRA Rule 5121. Therefore, this offering will be conducted in accordance with FINRA Rule 5121, which requires, among other things, that a qualified independent underwriter has participated in the preparation of, and has exercised the usual standards of “due diligence” with respect to, this prospectus and the registration statement of which this prospectus forms a part. Goldman Sachs & Co. LLC has agreed to act as qualified independent underwriter for the offering and to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act, specifically including those inherent in Section 11 of the Securities Act. We have agreed to indemnify Goldman Sachs & Co. LLC against liabilities incurred in connection with acting as qualified independent underwriter, including liabilities under the Securities Act. Credit Suisse Securities (USA) LLC will not confirm any sales to any account over which it exercises discretionary authority without the specific written approval of the transaction from the account holder.

Canada

Resale restrictions

The distribution of the ADSs in Canada is being made only in the provinces of British Columbia, Alberta, Ontario and Quebec on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of the ADSs are made. Any resale of the ADSs in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions. Purchasers are advised to seek legal advice prior to any resale of the securities.

Representations of Canadian purchasers

By purchasing ADSs in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:

 

   

the purchaser is entitled under applicable provincial securities laws to purchase the ADSs without the benefit of a prospectus qualified under those securities laws as it is both an “accredited investor” as defined under National Instrument 45-106—Prospectus Exemptions and a “permitted client” as defined in National Instrument 31-103—Registration Requirements, Exemptions and Ongoing Registrant Obligations;

 

   

where required by law, the purchaser is purchasing as principal and not as agent; and

 

   

the purchaser has reviewed the text above under Resale Restrictions.

 

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Underwriter Conflicts

Canadian purchasers are hereby notified that the underwriters are relying on the exemption set out in section 3A.3 or 3A.4, if applicable, of National Instrument 33-105—Underwriting Conflicts from having to provide certain conflict of interest disclosure in this prospectus.

Statutory rights of action

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the offering memorandum (including any amendment thereto) such as this prospectus contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

Language

Upon receipt of this prospectus, each Canadian purchaser hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the securities described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaque acheteur canadien confirme par les présentes qu’il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d’achat ou tout avis) soient rédigés en anglais seulement.

European Economic Area

In relation to each Member State of the European Economic Area, each a “Relevant State”, no ADSs have been offered or will be offered pursuant to this offering to the public in that Relevant State prior to the publication of a prospectus in relation to the ADSs which has been approved by the competent authority in that Relevant State or, where appropriate, approved in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation, except that offers of ADSs may be made to the public in that Relevant State at any time under the following exemptions under the Prospectus Regulation:

 

   

to any legal entity which is a qualified investor as defined under Article 2 of the Prospectus Regulation;

 

   

to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the Prospectus Regulation), subject to obtaining the prior consent of the underwriters for any such offer; or

 

   

in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

provided that no such offer of ADSs shall require us or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.

For the purposes of this provision, the expression an “offer to the public” in relation to any ADSs in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any ADSs to be offered so as to enable an investor to decide to purchase or subscribe for any ADSs, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.

Hong Kong

The ADSs may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong),

 

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(ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules promulgated thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the ADSs may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to ADSs which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules promulgated thereunder.

People’s Republic of China

This document may not be circulated or distributed in the PRC and the ADSs may not be offered or sold, and will not be offered or sold to any person for re-offering or resale directly or indirectly to any resident of the PRC or for the benefit of, legal or natural persons of the PRC except pursuant to applicable laws and regulations of the PRC. Further, no legal or natural persons of the PRC may directly or indirectly purchase any of the ADSs or any beneficial interest therein without obtaining all prior PRC’s governmental approvals that are required, whether statutorily or otherwise. Persons who come into possession of this prospectus supplement are required by the issuer and its representatives to observe these restrictions. For the purpose of this paragraph, PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.

Singapore

This document has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this document and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of ADSs may not be circulated or distributed, nor may ADSs be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor (as defined in Section 4A of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA) pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA and (in the case of an accredited investor) Regulation 3 of the Securities and Futures (Classes of Investors) Regulations 2018, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where ADSs are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

 

   

a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

 

   

a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

securities or securities-based derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired ADSs pursuant to an offer made under Section 275 of the SFA except:

 

   

to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;

 

   

where no consideration is or will be given for the transfer;

 

   

where the transfer is by operation of law;

 

 

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as specified in Section 276(7) of the SFA; or

 

   

as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.

Any reference to the SFA is a reference to the Securities and Futures Act, Chapter 289 of Singapore and a reference to any term as defined in the SFA or any provision in the SFA is a reference to that term as modified or amended from time to time including by such of its subsidiary legislation as may be applicable at the relevant time.

Notification under Section 309B(1)(c) of the SFA—The classification of the ADSs offered or sold under this offering are prescribed capital markets products (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Excluded Investment Products (as defined in Monetary Authority of Singapore, or the MAS, Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

United Kingdom

No ADS have been offered or will be offered pursuant to the offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the ADS which has been approved by the Financial Conduct Authority, except that offers of ADSs may be made to the public in the United Kingdom at any time:

 

   

to any legal entity which is a qualified investor as defined under Article 2 of the UK Prospectus Regulation;

 

   

to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the UK Prospectus Regulation), subject to obtaining the prior consent of the underwriters for any such offer; or

 

   

in any other circumstances falling within Section 86 of the FSMA,

provided that no such offer of ADSs shall require us or any of the underwriters to publish a prospectus pursuant to Section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.

For the purposes of this provision, the expression an “offer to the public” in relation to any ADSs in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any ADSs to be offered so as to enable an investor to decide to purchase or subscribe for any ADSs and the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.

 

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LEGAL MATTERS

Certain legal matters of United States federal securities and New York State laws in connection with this offering will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom LLP. The validity of the ordinary shares offered in this offering and certain legal matters as to Cayman Islands law will be passed upon for us by Maples and Calder (Hong Kong) LLP. Certain legal matters as to Thai law will be passed upon for us by Thanathip & Partners.

Certain legal matters of United States federal securities and New York State laws in connection with this offering will be passed upon for the underwriters by Latham & Watkins LLP.

Skadden, Arps, Slate, Meagher & Flom LLP may rely upon Maples and Calder (Hong Kong) LLP with respect to matters governed by Cayman Islands law, Thanathip & Partners with respect to matters governed by Thai law, and Zhong Lun Law Firm with respect to matters governed by PRC law.

EXPERTS

The financial statements as of December 31, 2019 and 2020, and for each of the three years in the period ended December 31, 2020, and the related financial statement schedule included in this Prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion on the financial statements and financial statement schedule and includes two explanatory paragraphs referring to the restatement for correction of an error and the translation of Singapore Dollars to United States Dollars). Such financial statements and financial statement schedule have been so included in reliance upon the report of such firm given upon the authority of such firm as experts in accounting and auditing. The office of Deloitte & Touche LLP is located at 6 Shenton Way, OUE Downtown 2, #33-00, Singapore 068809.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement, including relevant exhibits, with the SEC on Form F-1 under the Securities Act with respect to the underlying ordinary shares represented by the ADSs to be sold in this offering. We have also filed a related registration statement on Form F-6 with the SEC to register the ADSs. For the purposes of this section, the term “registration statement” means the original registration statement and any and all amendments thereto including the schedules and exhibits to the original registration statement or any amendment. This prospectus, which constitutes a part of the registration statement on Form F-1, does not contain all of the information contained in the registration statement. You should read our registration statements and their exhibits and schedules for further information with respect to us and our ADSs.

Immediately upon the effectiveness of the registration statement on Form F-1 of which this prospectus forms a part, we will become subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports on Form 20-F, and other information with the SEC. All information filed with the SEC, including the registration statement, can be obtained over the Internet at the SEC’s website at www.sec.gov or inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of documents, upon payment of a duplicating fee, by writing to the SEC.

As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. As we are a foreign private issuer, we will be required to file our annual report on Form 20-F within 120 days of the end of each year. However, we intend to furnish the depositary with our annual

 

230


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reports, which will include a review of operations and annual audited consolidated financial statements prepared in conformity with IFRS, and all notices of shareholders’ meetings and other reports and communications that are made generally available to our shareholders. The depositary will make such notices, reports and communications available to holders of ADSs and, if we so request, will mail to all record holders of ADSs the information contained in any notice of a shareholders’ meeting received by the depositary from us.

 

231


Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Consolidated Financial Statements

CONTENTS

 

     Page  

Report of Independent Registered Public Accounting Firm

     F-4  

Consolidated Statement of Financial Position as of December  31, 2019 and 2020

     F-5  

Consolidated Statement of Profit or Loss and other Comprehensive Income for the Years Ended December 31, 2018, 2019 and 2020

     F-6  

Consolidated Statement of Changes in Equity for the Years Ended December 31, 2018, 2019 and 2020

     F-7  

Consolidated Statement of Cash Flows for the Year Ended December  31, 2018, 2019 and 2020

     F-8 - F-9  

Notes to Consolidated Financial Statements

     F-10 - F-47  

Unaudited Consolidated Financial Statements of TDCX Inc and its subsidiaries

  

Consolidated Statement of Financial Position as of December 31, 2020 and June 30, 2021

     F-55  

Consolidated Statement of Profit or Loss and other Comprehensive Income for the Six Months Ended June 30, 2020 and 2021

     F-56  

Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2020 and 2021

     F-57  

Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2020 and 2021

     F-58 - F-59  

Notes to Consolidated Financial Statements

     F-60 - F-68  

 

F-1


Table of Contents

 

TDCX Inc. (formerly known as TDCX Capital Pte Ltd) and its Subsidiaries

(Registration No. 362018)

Consolidated Financial Statements

Years Ended December 31, 2018, 2019 and 2020

 

 

 

 

F-2


Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Consolidated Financial Statements

CONTENTS

 

     Page  

Report of Independent Registered Public Accounting Firm

     F-4  

Consolidated statements of financial position

     F-5  

Consolidated statements of profit or loss and other comprehensive income

     F-6  

Consolidated statements of changes in equity

     F-7  

Consolidated statements of cash flows

     F-8 - F-9  

Notes to consolidated financial statements

     F-10 - F-47  

Additional Information Financial Statement Schedule I

     F-48 - F-52  

 

F-3


Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of TDCX Inc. (formerly TDCX Capital Pte Ltd)

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of TDCX Inc. (formerly TDCX Capital Pte Ltd) and its subsidiaries (the “Group”) as of December 31, 2020 and 2019, and the related consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the schedule listed in Schedule I (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Restatement of the 2018 Financial Statements

As discussed in Note 35 to the financial statements, the accompanying 2018 financial statements have been restated to correct a misstatement.

Convenience Translation

Our audits also comprehended the translation of Singapore Dollar into United States Dollar and, in our opinion, such translation has been made in conformity with the basis stated in Note 3 to the financial statements. Such United States Dollar amounts are presented solely for the convenience of readers outside of Singapore.

Basis for Opinion

These financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on the Group’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Singapore

April 9, 2021 (September 7, 2021 as to the convenience translation in Note 3 and share split in Note 34)

We have served as the Group’s auditor since 2019.

 

F-4


Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Consolidated Statement of Financial Position

 

     Note      December 31,
2020
    December 31,
2020
    December 31,
2019
 
            US$’000     S$’000     S$’000  
            (Note 3)              

ASSETS

         

Current assets

         

Cash and cash equivalents

     7        44,486       59,807       35,920  

Fixed deposits

     8        5,748       7,727       837  

Trade receivables

     10        27,461       36,919       55,278  

Contract assets

     11        34,842       46,842       26,523  

Other receivables

     12        9,117       12,257       9,210  
     

 

 

   

 

 

   

 

 

 

Total current assets

        121,654       163,552       127,768  
     

 

 

   

 

 

   

 

 

 

Non-current assets

         

Pledged deposits

     9        1,768       2,377       2,110  

Other receivables

     12        4,369       5,874       3,708  

Plant and equipment

     13        30,185       40,581       40,730  

Right-of-use assets

     14        21,736       29,221       22,840  

Loan to an associate

     15        —         —         784  

Deferred tax assets

     21        1,175       1,580       1,197  

Investment in an associate

        170       229       33  
     

 

 

   

 

 

   

 

 

 

Total non-current assets

        59,403       79,862       71,402  
     

 

 

   

 

 

   

 

 

 

Total assets

        181,057       243,414       199,170  
     

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

         

Current liabilities

         

Other payables

     16        27,671       37,200       26,926  

Bank loans

     17        17,978       24,170       34,421  

Lease liabilities

     18        10,907       14,664       10,963  

Provision for reinstatement cost

     19        336       452       —    

Income tax payable

        9,861       13,257       6,956  
     

 

 

   

 

 

   

 

 

 

Total current liabilities

        66,753       89,743       79,266  
     

 

 

   

 

 

   

 

 

 

Non-current liabilities

         

Bank loans

     17        12,002       16,136       —    

Lease liabilities

     18        13,257       17,823       14,498  

Provision for reinstatement cost

     19        4,178       5,617       4,955  

Defined benefit obligation

     20        1,067       1,435       769  

Deferred tax liabilities

     21        96       129       236  
     

 

 

   

 

 

   

 

 

 

Total non-current liabilities

        30,600       41,140       20,458  
     

 

 

   

 

 

   

 

 

 

Capital, reserves and non-controlling interests

         

Share capital

     22        *       *       *  

Reserves

     30        (14,760     (19,843     (20,650

Retained earnings

        98,462       132,371       120,094  
     

 

 

   

 

 

   

 

 

 

Equity attributable to owners of the Group

        83,702       112,528       99,444  

Non-controlling interests

     23        2       3       2  
     

 

 

   

 

 

   

 

 

 

Total equity

        83,704       112,531       99,446  
     

 

 

   

 

 

   

 

 

 

Total liabilities and equity

        181,057       243,414       199,170  
     

 

 

   

 

 

   

 

 

 

 

*

Amount is less than S$1,000

See accompanying notes to financial statements.

 

F-5


Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Consolidated Statement of Profit or Loss and Other Comprehensive Income

 

     Note     2020     2020     2019     2018  
           US$’000     S$’000     S$’000     S$’000  
           (Note 3)                    

Revenue

     24       323,358       434,723       330,265       181,233  

Employee benefits expense

       (191,896     (257,985     (189,912     (109,373

Depreciation expense

       (24,595     (33,065     (24,599     (12,908

Rental and maintenance expense

       (7,887     (10,603     (9,220     (2,623

Recruitment expense

       (5,954     (8,005     (6,680     (3,792

Transport and travelling expense

       (1,119     (1,504     (2,083     (1,358

Telecommunication and technology expense

       (4,690     (6,305     (4,522     (2,385

Interest expense

       (2,275     (3,058     (2,893     (1,128

Other operating expense

       (11,779     (15,836     (10,478     (6,872

Gain on disposal of a subsidiary

       544       731       —         —    

Share of profit from an associate

       146       196       —         —    

Interest income

       442       594       465       268  

Other operating income

     26       5,590       7,514       717       546  
    

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income tax

       79,885       107,397       81,060       41,608  

Income tax expenses

     27       (15,846     (21,303     (7,524     (3,520
    

 

 

   

 

 

   

 

 

   

 

 

 

Profit for the year

     25       64,039       86,094       73,536       38,088  

Item that will not be reclassified to profit or loss:

          

Remeasurement of retirement benefit obligation

       (135     (181     (114     48  

Item that may be reclassified subsequently to profit or loss:

          

Exchange differences on translation of foreign operations

       533       717       954       (119
    

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the year

       64,437       86,630       74,376       38,017  
    

 

 

   

 

 

   

 

 

   

 

 

 

Profit attributable to:

          

- Owners of the Group

       64,038       86,093       73,535       35,271  

- Non-controlling interests

       1       1       1       2,817  
    

 

 

   

 

 

   

 

 

   

 

 

 
       64,039       86,094       73,536       38,088  
    

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income attributable to:

          

- Owners of the Group

       64,436       86,629       74,375       35,145  

- Non-controlling interests

       1       1       1       2,872  
    

 

 

   

 

 

   

 

 

   

 

 

 
       64,437       86,630       74,376       38,017  
    

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted earnings per share (in US$ or S$)

     28       0.52       0.70       0.60       0.31  
    

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of ordinary shares used in computing basic and diluted earnings per share

       123,500,000       123,500,000       123,500,000       123,500,000  
    

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes to financial statements.

 

F-6


Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Consolidated Statement of Changes in Equity

 

     Note      Share
Capital
     Reserves
(Note 30)
    Retained
earnings
    Equity
attributable
to owners
of the Group
    Non-
controlling
interests
    Total  
            S$’000      S$’000     S$’000     S$’000     S$’000     S$’000  

Balance at January 1, 2018

        *        (469     31,356       30,887       14,168       45,055  

Total comprehensive income for the year:

                

Profit for the year

        —          —         35,271       35,271       2,817       38,088  

Other comprehensive (loss) income

        —          (174     48       (126     55       (71
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

        —          (174     35,319       35,145       2,872       38,017  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transaction with owners recognized directly in equity:

                

Acquisition of non-controlling interests

     23        —          (20,961     —         (20,961     (17,039     (38,000

Dividends

     29        —          —         (3,002     (3,002     —         (3,002
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

        —          (20,961     (3,002     (23,963     (17,039     (41,002
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2018

        *        (21,604     63,673       42,069       1       42,070  

Total comprehensive income for the year:

                

Profit for the year

        —          —         73,535       73,535       1       73,536  

Other comprehensive income (loss)

        —          954       (114     840       —         840  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

        —          954       73,421       74,375       1       74,376  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Dividends representing transactions with owners recognized directly in equity

     29        —          —         (17,000     (17,000     —         (17,000
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2019

        *        (20,650     120,094       99,444       2       99,446  

Total comprehensive income for the year:

                

Profit for the year

        —          —         86,093       86,093       1       86,094  

Other comprehensive income (loss)

        —          717       (181     536       —         536  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

        —          717       85,912       86,629       1       86,630  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transfer of profits to legal reserve

        —          90       (90     —         —         —    
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transaction with owners recognized directly in equity:

                

Dividends

     29        —          —         (73,545     (73,545     —         (73,545
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

        —          —         (73,545     (73,545     —         (73,545
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2020

        *        (19,843     132,371       112,528       3       112,531  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Amount is less than S$1,000

See accompanying notes to financial statements.

 

F-7


Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Consolidated Statement of Cash Flows

 

     2020     2020     2019     2018  
     US$’000     S$’000     S$’000     S$’000  
     (Note 3)                 (Restated)  

Operating activities

        

Profit before income tax

     79,885       107,397       81,060       41,608  

Adjustment for:

        

Depreciation expense

     24,595       33,065       24,599       12,908  

Gain on early termination of right-of-use assets

     (127     (171     (21     —    

(Reversal) Loss allowance on trade and other receivables

     —         —         (18     8  

Bank facility fee

     40       54       55       6  

Interest income

     (442     (594     (465     (268

Interest expense

     2,275       3,058       2,893       1,128  

Remeasurement of retirement benefit obligation

     347       466       312       128  

Loss on disposal and write-off of plant and equipment

     2       3       —         17  

Rent concession

     (388     (521     —         —    

Gain on disposal of a subsidiary

     (544     (731     —         —    

Share of profit from an associate

     (146     (196     —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating cash flows before movements in working capital

     105,497       141,830       108,415       55,535  

Trade receivables

     14,206       19,099       (27,226     (7,111

Contract assets

     (14,923     (20,063     (7,734     (10,415

Other receivables

     (3,724     (5,007     (3,239     (4,146

Other payables

     7,069       9,505       9,833       4,503  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash generated from operations

     108,125       145,364       80,049       38,366  

Interest received

     442       594       465       268  

Income tax paid

     (11,533     (15,505     (4,793     (1,551

Income tax refunded

     23       31       323       237  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash from operating activities

     97,057       130,484       76,044       37,320  
  

 

 

   

 

 

   

 

 

   

 

 

 

Investing activities

        

Purchase of plant and equipment (Note A)

     (12,892     (17,332     (25,940     (18,958

Proceeds from sales of plant and equipment

     2       3       —         —    

Payment for restoration of office

     —         —         (66     —    

Increase in fixed deposits

     (5,106     (6,865     (837     —    

Increase in pledged deposits

     (196     (263     —         (1,905

Disposal of a subsidiary

     (7     (9     —         —    

Repayment from (Loan to) an associate

     584       784       (784     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (17,615     (23,682     (27,627     (20,863
  

 

 

   

 

 

   

 

 

   

 

 

 

 

F-8


Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Consolidated Statement of Cash Flows (cont’d)

 

     2020     2020     2019     2018  
     US$’000     S$’000     S$’000     S$’000  
     (Note 3)                 (Restated)  

Financing activities

        

Acquisition of non-controlling interests (Note 23)

     —         —         —         (38,000

Dividends paid

     (54,705     (73,545     (17,000     (3,002

Drawdown of bank loan

     8,926       12,000       10,000       30,400  

Amount due to a director

     —         —         —         6,230  

Repayment of amount due to a director

     —         —         (10,474     —    

Repayment of lease liabilities

     (10,581     (14,225     (11,590     (5,324

Interest paid

     (1,059     (1,424     (1,396     (831

Bank facility fee paid

     —         —         (115     (153

Repayment of bank loan

     (4,522     (6,080     (6,080     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (61,941     (83,274     (36,655     (10,680
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in cash and cash equivalents

     17,501       23,528       11,762       5,777  

Effect of foreign exchange rate changes on cash held in

foreign currencies

     267       359       185       (71

Cash and cash equivalents at beginning of year

     26,718       35,920       23,973       18,267  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of year (Note 7)

     44,486       59,807       35,920       23,973  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

Note A:

During the year, the additions to plant and equipment totaling S$18.2 million (2019: S$29.0 million, 2018: S$19.7 million) comprises paid purchases totaling S$17.3 million (2019: S$25.9 million,2018: S$18.9 million) and a provision of S$0.9 million (2019: S$3.0 million, 2018: S$0.7 million) for estimated future reinstatement cost relating to office improvements (Note 19).

See accompanying notes to financial statements.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

1

General

TDCX Inc. (“TDCX”) TDCX is a Company incorporated in Cayman Islands in April 2020 as TDCX Capital Pte Ltd and subsequent changed its name to TDCX Inc. (“the Company”) in January 2021. TDCX is 100% owned by its founder (the “Founder”) with a register share capital of S$1. TDCX and its consolidated subsidiaries (together, the “Group”) mainly provide outsource contact center services comprising sales and digital marketing, omnichannel customer experiences (“CX”) and social media content monitoring and moderation.

TDCX (SG) Pte. Ltd. (“TDCX SG”) and TDCX Holdings Pte. Ltd. (“TDCXH”) are companies incorporated in Singapore in October 1995 and June 1999 respectively. TDCX (KY) Pte. Ltd. (“TDCX KY”) is a Company incorporated in Cayman Islands in January 2020. TDCX SG, TDCXH and TDCX KY are consolidated subsidiaries of TDCX as a result of the reorganisations further described below.

Prior to September 2018, TDCX SG was 60% owned by the Founder and 40% owned by a third party. In September 2018, 40% of TDCX SG was acquired by TDCXH by paying cash in an amount ofS$38 million (Note 23). In January 2019, the Founder reduced his 60% equity interest in TDCX SG through cancellation of his shares in TDCX SG and therefore, TDCX SG became a wholly owned subsidiary of TDCXH.

On December 22, 2020, TDCXH was acquired by TDCX KY by paying cash in an amount of S$2 and TDCXH became a wholly owned subsidiary of TDCX KY.

On March 23, 2021, TDCX acquired 100% of TDCX KY from the Founder. As TDCX, TDCX KY, TDCXH and TDCX SG were under common control of the Founder during all the periods presented, the acquisitions of TDCX SG and TDCXH by TDCX KY as well as the acquisition of TDCX KY by TDCX were accounted for in a manner similar to a pooling of interest with assets and liabilities all reflected at their historical amounts in the Group’s consolidated financial statements as if the reorganization had always been in place. As such, the Group’s consolidated financial statements were prepared as if TDCX has control over TDCX KY, TDCXH and TDCX SG for all periods presented.

The consolidated financial statements of the Group for the financial year ended December 31, 2020 were authorized for issue by the Board of Directors of TDCX on April 9, 2021.

 

2

Adoption of new and revised standards

New and amended IFRS Standards that are effective for the current year

Impact of the initial application of Covid-19-Related Rent Concessions Amendment to IFRS 16

In May 2020, the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16) that provides practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-19, by introducing a practical expedient to IFRS 16. The practical expedient permits a lessee to elect not to assess whether a COVID-19-related rent concession is a lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the COVID-19-related rent concession the same way it would account for the change applying IFRS 16 if the change were not a lease modification.

The practical expedient applies only to rent concessions occurring as a direct consequence of COVID-19 and only if all of the following conditions are met:

 

  a)

The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

  b)

Any reduction in lease payments affects only payments originally due on or before June 30, 2021 (a rent concession meets this condition if it results in reduced lease payments on or before June 30, 2021 and increased lease payments that extend beyond June 30, 2021); and

 

  c)

There is no substantive change to other terms and conditions of the lease.

In the current financial year, the Group has applied the amendments to IFRS 16 (as issued by the IASB in May 2020) in advance of its effective date.

Impact on accounting for changes in lease payments applying the exemption

The Group has applied the practical expedient retrospectively to all rent concessions that meet the conditions in IFRS 16:46B, and has not restated prior period figures.

The Group has benefited from an average 2 months waiver of lease payments on leased office space. The waiver of lease payments of S$0.5 million has been accounted for as a negative variable lease payment in profit or loss. The Group has derecognized the part of the lease liability that has been extinguished by the forgiveness of lease payments, consistent with the requirements of IFRS 9:3.3.1.

Amendments to IAS 1 and IAS 8 Definition of material

The Group has adopted the amendments to IAS 1 and IAS 8 for the first time in the current year. The amendments make the definition of material in IAS 1 easier to understand and are not intended to alter the underlying concept of materiality in IFRS Standards. The concept of ‘obscuring’ material information with immaterial information has been included as part of the new definition.

The threshold for materiality influencing users has been changed from ‘could influence’ to ‘could reasonably be expected to influence’. The definition of material in IAS 8 has been replaced by a reference to the definition of material in IAS 1. In addition, the IASB amended other Standards and the Conceptual Framework that contain a definition of ‘material’ or refer to the term ‘material’ to ensure consistency.

New and revised IFRS Standards in issue but not yet effective

At the date of authorisation of these financial statements, the Group has not applied the following new and revised International Financial Reporting Standards (“IFRS”) that have been issued but are not yet effective:

 

Amendments to IAS 1

  

Classification of Liabilities as Current or Non-current

Amendments to IFRS 3

  

Reference to the Conceptual Framework

Amendments to IAS 16

  

Property, Plant and Equipment—Proceeds before Intended Use

Annual improvements to IFRS
Standards 2018 – 2020 Cycle

  

Amendments to IFRS 1-First-time Adoption of International Standards, IFRS 9 Financial instruments, IFRS 16 Leases and IAS 41 Agriculture.

The management do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods.

 

3

Summary of significant accounting policies

BASIS OF ACCOUNTING—The consolidated financial statements have been prepared in accordance with IFRS issued by International Accounting Standards Board (“IASB”).

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

The financial statements have been prepared in accordance with the historical cost basis, except as disclosed in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for leasing transactions that are within the scope of IFRS 16 Leases, and measurements that have some similarities to fair value but are not fair value, such as value in use in IAS 36 Impairment of Assets.

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

 

   

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

 

   

Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

 

   

Level 3 inputs are unobservable inputs for the asset or liability.

The principal accounting policies adopted are set out below.

BASIS OF CONSOLIDATION—The consolidated financial statements incorporate the financial statements of the Company and entities (including structure entities) controlled by the Group and its subsidiaries. Control is achieved when the Company:

 

   

has power over the investee;

 

   

is exposed, or has rights, to variable returns from its involvement with the investee; and

 

   

has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the company’s voting rights in an investee are sufficient to give it power, including:

 

   

the size of the company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

 

   

potential voting rights held by the company, other vote holders or other parties;

 

   

rights arising from other contractual arrangements; and

 

   

any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Those interests of non-controlling shareholders that are present ownership interests entitling their holders to a proportionate share of net assets upon liquidation may initially be measured at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement is made on an acquisition-by-acquisition basis. Other non-controlling interests are initially measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the company.

When the Group loses control of a subsidiary, the gain or loss on disposal recognized in profit or loss is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), less liabilities of the subsidiary and any non-controlling interests. All amounts previously recognized in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as required/permitted by applicable IFRS Standards). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9 when applicable, or the cost on initial recognition of an investment in an associate or a joint venture.

ASSOCIATE—An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control over those policies. The Group holds 10% ownership interests in a company. The Group accounts for this Company as an associate as it has significant influence by virtue of its representation on the Board.

The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting.

Under the equity method, an investment in an associate is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the Group’s share of the profit

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

or loss and other comprehensive income of the associate. When the Group’s share of losses of an associate exceeds the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

An investment in an associate is accounted for using the equity method from the date on which the investee becomes an associate. On acquisition of the investment in an associate, any excess of the cost of the investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognized immediately in profit or loss in the period in which the investment is acquired.

The requirements of IAS 28 Investments in Associate and Joint Ventures are applied to determine whether it is necessary to recognize any impairment loss with respect to the Group’s investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill, if any) is tested for impairment in accordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount, any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.

When a Group entity transacts with an associate of the Group, profits and losses resulting from the transactions with the associate are recognized in the Group’s consolidated financial statements only to the extent of interests in the associate that are not related to the Group.

FINANCIAL INSTRUMENTS—Financial assets and financial liabilities are recognized on the statement of financial position when the Group becomes a party to the contractual provisions of the instruments. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets and financial liabilities, as appropriate, on initial recognition.

Financial assets

Classification of financial assets

Debt instruments mainly comprise bank balances and trade and other receivables which meet the following conditions and are subsequently measured at amortized cost:

 

   

The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows only; and

 

   

The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (FVTOCI):

 

   

The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and

 

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Notes to Consolidated Financial Statements

 

   

The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that do not meet the amortized cost criteria or the fair value through other comprehensive income (“FVTOCI”) criteria are classified as fair value through profit or loss (“FVTPL”).

In addition, debt instruments that meet either the amortized cost criteria or the FVTOCI criteria may be designated irrevocably as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases. The Group has designated debt instruments as at FVTPL as disclosed in Note 15.

Investments in equity instruments are classified as at FVTPL, unless the Group irrevocably elects to designate an equity investment that is neither held for trading nor a contingent consideration arising from a business combination as at FVTOCI on initial recognition. The Group has elected to designate the investment in equity instrument at FVTPL as disclosed in Note 15.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognized in profit or loss. The net gain or loss recognized in profit or loss includes any dividend or interest earned on the financial asset.

Amortized cost and effective interest method

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period.

The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.

The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. On the other hand, the gross carrying amount of a financial asset is the amortized cost of a financial asset before adjusting for any loss allowance.

Interest income is recognized using the effective interest method for debt instruments measured subsequently at amortized cost, except for short-term balances when the effect of discounting is immaterial.

Cash and cash equivalents

Cash and cash equivalents in the statement of cash flows comprise cash on hand and demand deposits, bank overdrafts, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses (“ECL”) on trade and other receivables. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

The Group always recognizes lifetime ECL for trade receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

For all other financial instruments, the Group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. The assessment of whether lifetime ECL should be recognized is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

Significant increase in credit risk

In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort. Forward-looking information considered includes the future prospects of the industries in which the Group’s debtors operate and impact of COVID-19, as well as consideration of various external sources of actual and forecast economic information that relate to the Group’s core operations.

The Group presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 90 days past due, unless the Group has reasonable and supportable information that demonstrates otherwise.

The Group assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have low credit risk at the reporting date. A financial instrument is determined to have low credit risk if i) the financial instrument has a low risk of default, ii) the borrower has a strong capacity to meet its contractual cash flow obligations in the near term and iii) adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.

The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.

Definition of default

The Group considers for internal credit risk management purposes and based on historical experience, that an event of default to have occurred when there is information obtained from internal or external sources that indicates the debtor is unlikely to pay its creditors, including the Group.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

Irrespective of the above analysis, the Group considers that default has occurred when a financial asset is more than 90 days past due unless the Group has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.

Credit-impaired financial assets

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. These events include evidence that there is significant financial difficulty of the debtors or it is becoming probable that the debtor will enter bankruptcy.

Write-off policy

The Group writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognized in profit or loss.

Measurement and recognition of expected credit losses

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date.

For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.

If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to 12-month ECL at the current reporting date.

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognize the financial asset and a collateralized borrowing for the proceeds received.

On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Other payables and bank loans

Other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost, using the effective interest method, with interest expense recognized on an effective yield basis, except for short-term payables when the recognition of interest would be immaterial.

Interest-bearing loans are initially recognized at fair value, and are subsequently measured at amortized cost, using the effective interest method.

Derecognition of financial liabilities

The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.

PLANT AND EQUIPMENT—Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, using the straight-line method, on the following bases:

 

    

Years

Leasehold improvements

  

Shorter of the useful lives or the lease terms

(ranging from 2 to 6 years)

Furniture and fittings

   5

Office equipment and software

   3 to 5

Depreciation of plant and equipment in progress commences when the assets are ready for their intended use. The estimated useful lives, residual value and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Fully depreciated assets still in use are retained in the financial statements

Right-of-use assets are depreciated over the shorter period of the lease term and the useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset.

The gain or loss arising on the disposal or retirement of a plant and equipment is determined as the difference between the sales proceeds and the carrying amounts of the asset and is recognized in profit or loss.

IMPAIRMENT OF TANGIBLE ASSETS—At the end of each reporting period, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have

 

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Notes to Consolidated Financial Statements

 

suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognized in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized in profit or loss to the extent that it eliminates the impairment loss which has been recognized for the asset in prior years immediately.

PROVISIONS—Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, and it is probable that the Group will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present and future obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all other economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

REVENUE RECOGNITION—Revenue is measured based on the consideration specified in a contract with a customer and recognized as and when control of a service is transferred to a customer.

Revenues are recognized upon the application of the following steps:

1. Identification of the contract or contracts with a customer;

2. Identification of the performance obligations in the contract;

3. Determination of the transaction price;

4. Allocation of the transaction price to the performance obligations in the contract; and

5. Recognition of revenue when, or as, the performance obligation is satisfied.

The Group enters into master services agreements and statements of work which set out the details of the work streams for each campaign to be provided to the customers. The work streams are generally capable of being distinct and accounted for as separate performance obligations. Based on the transaction price as set up in the agreement for each performance obligation, the Group will invoice to the customers on a monthly basis as each performance obligation is satisfied after agreeing with the customers on any fee adjustments based on whether the Group meets (or the failure to meet) certain key performance indicators (where applicable) during that month. The Group recognizes the revenue using the right to invoice practical expedient as the output method because the amount it has the right to invoice corresponds directly with the value to the customer of the Group’s performance completed to date, and any variable consideration would be resolved at the point of billing.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

A contract asset is recorded when revenue is recognized prior to invoicing and a contract liability is recorded when the Group invoices the customers prior to satisfying the performance obligations. The contracts do not include a significant financing component as the normal credit term is between 30 to 90 days.

Revenue recognized from contracts with customers is disaggregated into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

 

   

Omnichannel CX solutions—The Group provides omnichannel CX solutions by providing information about its clients, products and services to their customers. The objective is to help its clients manage their relationships with their customers. This includes technical support for software, consumer electronic devices and telemarketing campaigns. Customer contact occurs through phone call, online chat, SMS, email and a variety of other channels and are typically on general enquiries or after-sales service issue resolution. Each service is viewed as one performance obligation and revenue is recognized over time by using the output method when the performance obligation is satisfied on a monthly basis measured by the value of the service performed to date.

 

   

Sales and digital marketing—The Group provides sales and digital marketing services through contacts made by the Group’s sales and digital marketing agents with the objective to promote and sell the products of its customers. This primarily involves helping the digital advertising platform clients to attract more advertisers and grow their Internet and social media advertising businesses. Each scope of service is viewed as one performance obligation and revenue is recognized over time by using the output method when the performance obligation is satisfied on a monthly basis measured by the value of the service performed to date.

 

   

Content monitoring and moderation—The Group provides content monitoring and moderation services to a customer by way of content moderating, identification review, authenticity and access flows and other related services. This is performed through review of social media platforms for content that violates terms of service or is illegal pursuant to the specifications and guidelines provided by the client. Revenue is recognized over time by using the output method when the performance obligation is satisfied on a monthly basis measured by the value of the service performed to date.

 

   

Workspace, payroll services and other services—The Group provides workspace and payroll services through provision of fully equipped and serviced workstations and provision of payroll and human resource administration services to some of its customers. Revenue is recognized over time when the performance obligation is satisfied on a monthly basis measured by the value of the service performed to date.

Value of the service performed is determined based on the hours incurred times a fixed rate as stipulated in the contract. Any variabilities in the transaction price are resolved before each billing.

The Group has elected to apply the practical expedient provided in IFRS 15, to recognize revenue in the amount to which it has the right to invoice and has not disclosed the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period.

The Group incurred certain costs such as personnel and travel costs, hiring, on boarding and training employees and capital expenditures incurred in infrastructure, renovation and leases of office space which are incidental to its contracts with the customers. IFRS 15 requires an entity to recognize an asset from the costs incurred to fulfil a contract with a customer if the costs are not within the scope of another IFRS Standard, and only if those costs meet all the following criteria:

 

   

the costs relate directly to a contract or to an anticipated contract that the Group can specifically identify;

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

   

the costs generate or enhance resources of the Group that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and

 

   

the costs are expected to be recovered.

The Group recognized costs as expenses as they are incurred when they relate to personnel and travelling, hiring and training employees when they do not meet the criteria above. In cases where the start-up costs to fulfil a contract includes capital expenditures in infrastructure, renovation and leases of offices space, those costs are recorded based on the guidance included in IAS 16 Property Plant and Equipment and IFRS 16 Leases.

Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

LEASES

The Group as a lessee

The Group leases office space to run its operation.

The Group assesses whether a contract is or contains a lease, at inception of the contract on the basis of whether the customer has the right to control the use of an identified asset for a period of time in exchange for consideration. The Group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date. The lease payment shall be discounted using the interest rate implicit in the lease. If the interest rate implicit in the lease cannot be readily determined, the Group uses the incremental borrowing rate. The Group’s incremental borrowing rate is determined based on the interest rate of the Group’s bank loans if the Group would have to pay to borrow over a similar term and with a similar security the funds necessary to obtain an asset of a similar value of the right-of-use asset in a similar economic environment.

Lease payments included in the measurement of the lease liability comprise:

 

   

Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

 

   

The amount expected to be payable by the lessee under residual value guarantees;

 

   

The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

 

   

Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line (current and non-current) in the consolidated statement of financial position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

The Group re-measures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

 

   

The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

 

   

The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

 

   

A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Group incurs an obligation for costs to dismantle and remove a lease improvement asset and restores the underlying lease assets to their original condition required by the terms and conditions of the lease, a provision is recognized to the extent that the costs relate to a right-of-use asset.

Right-of-use assets are depreciated over the shorter period of contracted lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are presented as a separate line in the consolidated statement of financial position.

The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss.

GOVERNMENT GRANTS—Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them and the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets (including property, plant and equipment) are recognized as deferred income in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable.

BORROWING COSTS—All borrowing costs are recognized in profit or loss in the period in which they are incurred.

RETIREMENT BENEFIT COSTS—Payments to defined contribution retirement benefit plans are charged as an expense when employees have rendered the services entitling them to the contributions.

 

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Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out as at each reporting date. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:

 

   

Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

 

   

Net interest expense or income; and

 

   

Remeasurement.

The Group presents the first two components of defined benefit costs in profit or loss in the line item employee benefits expense. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognized in the statement of financial position represents the actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plan.

A liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.

EMPLOYEE LEAVE ENTITLEMENT—Employee entitlements to annual leave are recognized when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period.

INCOME TAX—Income tax expense represents the sum of the tax currently payable and deferred tax.

Tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of profit or loss and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the Group and subsidiaries operate by the end of the reporting period.

A provision is recognized for those matters for which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. The assessment is based on the judgement of tax professionals within the Group supported by previous experience in respect of such activities and in certain cases based on specialist independent tax advice.

Deferred tax is recognized on the differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realized based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax are recognized as an expense or income in profit or loss.

FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION—The individual financial statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the Group are presented in Singapore Dollar.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognized in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also recognized in other comprehensive income.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) are expressed in Singapore Dollars using exchange rates prevailing at the end of the reporting period. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in a separate component of equity under the header of foreign currency translation reserve.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

Exchange differences arising from the translation of the net investment in foreign entities (including monetary items that, in substance, form part of the net investment in foreign entities) and of borrowings, are recognized in other comprehensive income and accumulated in a separate component of equity under the header of translation reserve.

CONVENIENCE TRANSLATION—The translations of Singapore Dollar amounts into USD for the consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, consolidated statement of cash flow, and segmental reporting as disclosed in Note 32” for the year ended December 31, 2020 are included solely for the convenience of readers outside of Singapore and have been made at the rate of S$1.3444 to US$1, the approximate rate of exchange at June 30, 2021. Such translations should not be construed as representations that the Singapore Dollar amounts could be converted into USD at that or any other rate.

 

4

Critical accounting judgements and key sources of estimation uncertainty

In applying the Group’s accounting policies, which are described in Note 3, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the entity accounting policies

In the process of applying the accounting policies, management did not make any material judgements that have significant effect on the amounts recognized in the financial statements apart from those involving estimates as discussed below.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

Expected credit loss for trade receivables and contract assets

The Group recognizes lifetime ECL for trade receivables and contract assets, using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions. The carrying amount of the trade receivables and contract assets at the end of the reporting period are disclosed in Notes 10 and 11 to the financial statements.

The management has assessed that, no impairment allowance is necessary in respect of trade receivables and contract assets, based on historical experience in the collection and ECL model, other than as disclosed in Notes 10 and 11 respectively. These receivables are mainly arising from customers that have a good credit record with the Group.

 

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Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

5

Financial instruments, financial risks and capital management

 

  (a)

Categories of financial instruments

The following table sets out the financial instruments as at the end of the reporting period:

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Financial assets

     

Financial assets at amortized cost

     119,739        102,560  

Financial assets at FVTPL—Loan to associate

     —          784  
  

 

 

    

 

 

 

Financial liabilities

     

Financial liabilities at amortized cost

     76,345        61,159  

Lease liabilities

     32,487        25,461  
  

 

 

    

 

 

 

 

  (b)

Financial risk management policies and objectives

The Group’s overall risk management policy seeks to minimize potential adverse effects on financial performance of the Group. There has been no change to the Group’s exposure to these financial risks or the manner in which it manages and measures the risk. The risks associated with these financial instruments and the policies to mitigate these risk are set out below.

 

  (i)

Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group’s credit risk is primarily attributable to its cash and cash equivalents and trade receivables and other receivables.

As at December 31, 2020, approximately 65% of the Group’s trade receivable arose from 4 customers (2019: approximately 81% of the Group’s trade receivable arose from 3 customers). Apart from this, the Group does not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are related entities.

Cash and cash equivalents are placed with credit-worthy financial institutions with high credit ratings assigned by international credit-rating agencies and therefore credit risk is limited. The Group has adopted procedures in extending credit terms to customers and monitoring its credit risk. Credit evaluations are performed on customers requiring credit over a certain amount. Before accepting any new customer, the Group carries out research on the credit risk of the new customer and assesses the potential customer’s credit quality and defines credit limits by customer. Limits attributed to customers are reviewed when necessary.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

The Group’s current credit risk grading framework comprises the following categories:

 

Category

  

Description

  

Basis for recognising ECL

Performing

  

The counterparty has a low risk of default and does not have any past-due amounts.

   12-month ECL

Doubtful

  

Amount is more than 90 days past due or there has been a significant increase in credit risk since initial recognition.

   Lifetime ECL—
not credit-impaired

In default

  

Amount is more than 120 days past due or there is evidence indicating the asset is credit-impaired.

   Lifetime ECL—
credit-impaired

Write-off

  

There is evidence indicating that the debtor is in severe financial difficulty and the Group has no realistic prospect of recovery.

   Amount is written off

The table below details the credit quality of the Group’s financial assets as well as maximum exposure to credit risk by credit risk rating grades:

 

    Note     Internal
credit

rating
    12-month or lifetime
ECL
    Gross
carrying
amount
    Loss
allowance
    Net carrying
amount
 
                      S$’000     S$’000     S$’000  

2020

           

Trade receivables

    10       (a)      

Lifetime ECL

(Simplified approach)

 

 

    36,919       —         36,919  

Contract assets

    11       (a)      

Lifetime ECL

(Simplified approach)

 

 

    46,842       —         46,842  

Other receivables

    12       Performing       12-month ECL       12,909       —         12,909  
         

 

 

   
            —      
         

 

 

   

2019

           

Trade receivables

    10       (a)      

Lifetime ECL

(Simplified approach)

 

 

    55,278       —         55,278  

Contract assets

    11       (a)      

Lifetime ECL

(Simplified approach)

 

 

    26,523       —         26,523  

Other receivables

    12       Performing       12-month ECL       8,415       —         8,415  
         

 

 

   
            —      
         

 

 

   

 

  (a)

The Group determines the expected credit losses on these items by using a provision matrix, estimated based on historical credit loss experience based on the past due status of the debtors, adjusted as appropriate to reflect current conditions and estimates of future economic conditions. Accordingly, the credit risk profile of these assets is presented based on their past due status.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

  (ii)

Interest rate risk management

Interest rate risk arises from the potential changes in interest rates that may have an adverse effect on the Group in the current reporting period and future years.

The Group’s primary interest rate relates to interest-bearing bank loans. The interest rate and terms of repayment of bank loans are disclosed in Note 17 of the financial statements.

The sensitivity analysis has been determined based on the exposure to interest rates for non-derivative instruments at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates. A 50 basis point increase or decrease is used and represents management’s assessment of the reasonably possible change in interest rates.

As at December 31, 2020 it is estimated that a 50 basis point change in interest rates will affect the Group’s profit before tax by S$0.2 million (2019: S$0.2 million).

 

  (iii)

Foreign currency risk management

The Group has operations in different jurisdictions and transacts in various foreign currencies. At the end of reporting periods, the carrying amounts of significant monetary assets and monetary liabilities denominated in currencies other than the respective Group entities’ functional currencies are as follows:

 

     Assets      Liabilities  
     2020      2019      2020      2019  
     S$’000      S$’000      S$’000      S$’000  

United States Dollar

     75,104        38,205        18,785        7,820  
  

 

 

    

 

 

    

 

 

    

 

 

 

The sensitivity rate used when reporting foreign currency risk to key management personnel is 5%, which is the change in foreign exchange rate that management deems reasonably possible which will affect outstanding foreign currency denominated monetary items at period end. If the respective Group entities’ functional currencies strengthen/weaken by 5% against the United States Dollar (“USD”), profit or loss will (decrease)/increase by S$2.8 million (2019: S$1.5 million).

The decrease in carrying amount of monetary assets is due to prompt collection of outstanding trade receivables as a result of tightened credit controls and the increase monetary liabilities denominated in USD is due to the expansion of the Group’s business in the regions that transact in USD.

 

  (iv)

Liquidity risk management

Liquidity risk is managed by matching the payment and receipt cycle. The Group maintains sufficient cash and cash equivalents and internally generated cash flows to finance its operations. The Group mitigates liquidity risk by maintaining some standby credit lines available.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

Non-derivative financial liabilities

The following table details the remaining contractual maturity for non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. Contractual undiscounted cash flows in the table below includes both interest and principal cash flows.

 

   

Interest

rate

  On demand
or within
1 year
    Within 2
to
3 years
    Within 3
to
5 years
    5 years
onwards
    Total
contractual
undiscounted
cash flows
    Adjustment     Carrying
amount
 
    %   S$’000     S$’000     S$’000     S$’000     S$’000     S$’000     S$’000  

December 31, 2020

               

Non-interest bearing

  —       36,039       —         —         —         36,039       —         36,039  

Variable interest rate instruments

  1.6% to 4.7%     23,736       7,463       5,051       —         36,250       (955     35,295  

Fixed interest rate instruments

  2.5%     1,043       1,200       3,065       —         5,308       (297     5,011  

Lease liabilities (fixed rate)

  1.6% to 8.8%     15,968       14,860       4,278       69       35,175       (2,688     32,487  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

December 31, 2019

               

Non-interest bearing

  —       26,738       —         —         —         26,738       —         26,738  

Variable interest rate instruments

  3.0% to 4.7%     36,419       —         —         —         36,419       (1,998     34,421  

Lease liabilities (fixed rate)

  3.0% to 8.8%     12,073       14,578       618       —         27,269       (1,808     25,461  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-derivative financial assets

All non-derivative financial assets of the Group as at December 31, 2020 and 2019 are repayable on demand or due within one year from the end of the reporting period, and are non-interest bearing, except for fixed deposits, pledged deposits and other receivables as disclosed in Notes 8, 9 and 12 respectively.

 

  (v)

Fair value of financial assets and financial liabilities

The carrying amounts of financial assets and liabilities on the statement of financial position approximate their respective fair values due to the relatively short-term maturity of these financial instruments. The fair values of other classes of financial assets and liabilities are disclosed in the respective notes to financial statements.

 

  (c)

Capital risk management policies and objectives

Management reviews the capital structure at least annually to ensure that the Group will be able to continue as a going concern. The capital structure comprises only issued capital, reserves and retained earnings. The Group’s overall strategy remains unchanged.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

6

Remuneration of key management personnel

The remuneration of directors and other members of key management personnel during the years were as follows:

 

     2020      2019      2018  
     S$’000      S$’000      S$’000  

Wages, salaries, bonuses and others

     7,606        6,318        3,978  

Post-employment benefits

     287        150        130  
  

 

 

    

 

 

    

 

 

 
     7,893        6,468        4,108  
  

 

 

    

 

 

    

 

 

 

 

7

Cash and cash equivalents

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Cash on hand

     15        15  

Cash at bank

     48,104        25,160  

Fixed deposits

     11,688        10,745  
  

 

 

    

 

 

 
     59,807        35,920  
  

 

 

    

 

 

 

Fixed deposits bear interest at an effective interest rate of 3.2% (2019: 2.9%) per annum and for tenure ranging from 7 days to 60 days (2019: 7 days to 60 days).

 

8

Fixed deposits

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Fixed deposits

     7,727        837  
  

 

 

    

 

 

 

Fixed deposits bear interest at an effective interest rate of 3.2% (2019: 2.9%) per annum and for tenure ranging from 90 days to 365 days (2019: 90 days to 365 days).

 

9

Pledged deposits

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Pledged deposits

     2,377        2,110  
  

 

 

    

 

 

 

The Group pledged deposits of S$1.9 million (2019: S$1.9mil) to a financial institution for securing of bank loans (Note 17). The remaining pledged deposits relate to deposits placed to comply with the local regulations of subsidiaries. Pledged deposits approximate fair value as at end of reporting period.

 

10

Trade receivables

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Outside parties

     36,919        55,278  
  

 

 

    

 

 

 

 

F-30


Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

The credit period on rendering of service to outside parties is 30 to 90 days (2019: 30 to 90 days). No interest is charged on the trade receivables during the credit period of the invoices. Thereafter, interest may be charged ranging from 12% to 15% per annum (2019: 12% to 15% per annum) on the outstanding balance.

Loss allowance for trade receivables has been measured at an amount equal to the lifetime ECL. The ECL on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtors, and where relevant general economic conditions of the industry in which the debtors operate.

The following table details the risk profile of trade receivables from contracts with customers based on the Group’s provision matrix. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished between the Group’s different customer base.

 

     Trade receivables – days past due  
     Current      1 – 30
days
     31 – 60
days
     61 – 90
days
     > 90
days
     Total  
     S$’000      S$’000      S$’000      S$’000      S$’000      S$’000  

December 31, 2020

                 

Estimated total gross carrying amount at default:

                 

Outside parties

     27,552        7,710        1,496        121        40        36,919  

Expected credit loss

     —          —          —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     27,552        7,710        1,496        121        40        36,919  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Trade receivables – days past due  
     Current      1 – 30
days
     31 – 60
days
     61 – 90
days
     > 90
days
     Total  
     S$’000      S$’000      S$’000      S$’000      S$’000      S$’000  

December 31, 2019

                 

Estimated total gross carrying amount at default:

                 

Outside parties

     36,313        13,908        4,429        329        299        55,278  

Expected credit loss

     —          —          —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     36,313        13,908        4,429        329        299        55,278  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The following table shows the movement in ECL that has been recognized for trade receivables in accordance with the simplified approach set out in IFRS 9:

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Balance at beginning of year

     —          8  

Credit to profit or loss

     —          (8
  

 

 

    

 

 

 

Balance at end of year

     —          —    
  

 

 

    

 

 

 

 

F-31


Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

11

Contract assets

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Unbilled receivables

     46,842        26,523  
  

 

 

    

 

 

 

Unbilled receivables are balances owed by the customers that arise from services performed. Any amount previously recognized as a contract asset is reclassified to trade receivables at the point at which it is invoiced to the customer. Contract assets increased by S$20.3 million (2019: S$7.9 million) due to the expansion of business.

Management estimates the loss allowance on amounts due from customers at an amount equal to lifetime ECL, taking into account the historical default experience and the future prospects of the industry in which the customers operate in. None of the amounts due from customers at the end of the reporting period is past due and management considered the amount to have low credit risk.

 

12

Other receivables

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Prepayments

     4,500        4,503  

Deposits

     9,115        5,874  

Grant receivable

     722        —    

Others

     3,794        2,541  
  

 

 

    

 

 

 
     18,131        12,918  
  

 

 

    

 

 

 

Analysed as:

     

Current

     12,257        9,210  

Non-current

     5,874        3,708  
  

 

 

    

 

 

 
     18,131        12,918  
  

 

 

    

 

 

 

Non-current other receivables relate to refundable deposits for office tenancies and utilities that are non-interest bearing and are due for repayment in years 2022 to 2026 (2019: 2021 to 2023). Non-current other receivables approximate fair value as at end of reporting period.

For purpose of impairment assessment, other receivables are considered to have low credit risk as they are not due for payment at the end of the reporting period and there has been no significant increase in the risk of default on the receivables since initial recognition. Accordingly, for the purpose of impairment assessment for these receivables, the loss allowance is measured at an amount equal to 12-month ECL.

In determining the ECL, management has taken into account the historical default experience and the financial position of the counterparties, adjusted for factors that may be specific to the debtors in estimating the probability of default of each of these receivables, as well as the loss upon default in each case. Management has determined that those receivables are subject to immaterial credit loss and adequate loss allowance has been provided.

 

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Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

Movement in loss allowance for other receivables:

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Balance at beginning of year

     —          10  

Credit to profit or loss

     —          (10
  

 

 

    

 

 

 

Balance at end of year

     —          —    
  

 

 

    

 

 

 

 

13

Plant and equipment

 

    Leasehold
improvements
    Furniture
and fittings
    Office equipment
and software
    Equipment-in-progress     Total  
    S$’000     S$’000     S$’000     S$’000     S$’000  

Cost:

         

At January 1, 2019

    16,755       4,369       21,006       2,140       44,270  

Additions

    9,377       1,329       5,058       13,240       29,004  

Reclassification

    6,976       2,122       3,509       (12,607     —    

Disposals

    (216     —         (83     —         (299

Written off

    (635     (92     (146     —         (873

Currency alignment

    356       132       354       61       903  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At December 31, 2019

    32,613       7,860       29,698       2,834       73,005  

Additions

    3,228       659       3,643       10,701       18,231  

Reclassification

    2,423       184       4,839       (7,446     —    

Disposals

    —         —         (28     —         (28

Written off

    —         —         (279     —         (279

Currency alignment

    449       95       313       23       880  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At December 31, 2020

    38,713       8,798       38,186       6,112       91,809  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated depreciation:

         

At January 1, 2019

    6,555       1,417       11,387       —         19,359  

Depreciation for the year

    7,548       1,108       5,101       —         13,757  

Disposals

    (216     —         (83     —         (299

Written off

    (635     (92     (146     —         (873

Currency alignment

    99       32       200       —         331  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At December 31, 2019

    13,351       2,465       16,459       —         32,275  

Depreciation for the year

    10,372       1,530       7,145       —         19,047  

Disposals

    —         —         (28     —         (28

Written off

    —         —         (274     —         (274

Currency alignment

    118       10       80       —         208  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At December 31, 2020

    23,841       4,005       23,382       —         51,228  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Carrying amount:

         

At December 31, 2019

    19,262       5,395       13,239       2,834       40,730  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At December 31, 2020

    14,872       4,793       14,804       6,112       40,581  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

At December 31, 2020, the Group had entered into contractual commitments for the acquisition of plant and equipment amounting to S$6.9 million (2019: S$0.7 million).

 

14

Right-of-use assets

 

     Office space  
     S$’000  

Cost:

  

At January 1, 2019

     28,082  

Additions

     14,917  

Expired and early termination

     (4,688

Currency alignment

     454  
  

 

 

 

At December 31, 2019

     38,765  

Additions

     22,837  

Expired and early termination

     (8,707

Currency alignment

     391  
  

 

 

 

At December 31, 2020

     53,286  
  

 

 

 

Accumulated depreciation:

  

At January 1, 2019

     9,496  

Depreciation for the year

     10,842  

Expired and early termination

     (4,554

Currency alignment

     141  
  

 

 

 

At December 31, 2019

     15,925  

Depreciation for the year

     14,018  

Expired and early termination

     (6,008

Currency alignment

     130  
  

 

 

 

At December 31, 2020

     24,065  
  

 

 

 

Carrying amount:

  

At December 31, 2019

     22,840  
  

 

 

 

At December 31, 2020

     29,221  
  

 

 

 

Amount recognized in profit and loss

 

     2020      2019      2018  
     S$’000      S$’000      S$’000  

Depreciation expense on right-of-use assets

     14,018        10,842        6,386  

Interest expense on lease liabilities (Note 25)

     1,559        1,383        725  

Expenses relating to lease of low value assets

     2,027        1,344        718  
  

 

 

    

 

 

    

 

 

 

The Group leases office space with lease term ranging from 1 to 5 years. At December 31, 2020, the total cash outflow for leases amount to S$14.7 million (2019: S$11.6 million).

 

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Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

15

Loan to an associate

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Debt instrument at FVTPL

     —          784  
  

 

 

    

 

 

 

Loan to associate represented a debt instrument issued by an associate and individual shareholders of the associate, held by TDCXH. The debt instrument is repayable at the demand of TDCXH during the term of 3 years from December 21, 2020 and bears an interest of 3% above HSBC Best Lending Rate. At any time during the period that the principal and any interest thereon are outstanding, TDCXH had the option to convert the debt into equity representing a majority interest in this associate. Subsequent to the conversion, the individual shareholders reserved a right to buy back such majority interest within 4 months from the date of such conversion. Loan to an associate was measured at FVTPL. The loan was repaid in 2020.

 

16

Other payables

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Outside parties

     35,875        26,617  

Contract liabilities

     —          188  

Deferred grant income

     1,161        —    

Others

     164        121  
  

 

 

    

 

 

 
     37,200        26,926  
  

 

 

    

 

 

 

The average credit period on payables is 30 days (2019: 30 days). Interest is charged ranging from 0% to 15% per annum (2019: 0% to 15%) on the outstanding balance.

 

17

Bank loans

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Secured—at amortized cost:

     

Bank loans

     40,306        34,421  
  

 

 

    

 

 

 

Analysed between:

     

Current portion

     

Within 1 year

     24,170        34,421  

Non-current portion

     

Within 2 to 5 years

     16,136        —    
  

 

 

    

 

 

 
     40,306        34,421  
  

 

 

    

 

 

 

Interest payable (included in bank loans)

     308        308  
  

 

 

    

 

 

 

On September 18, 2018, TDCX SG entered into a financing facility with a financial institution lender and drew down a loan with principal amount of S$30.4 million. The facility bears an interest rate of 3% over

 

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Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

the prevailing cost of funds for the financial institution lender (as determined by the financial institution lender). The bank loan is denominated in Singapore Dollars with 20 equal quarterly repayments commencing on January 17, 2019 and matures on October 17, 2023. During the year ended December 31, 2020, the TDCX SG has made repayments of S$6.0 million (2019: S$6.0 million).

On April 29, 2019, TDCX SG entered into a revised credit facility with the financial institution lender to provide for borrowings in an aggregate amount of S$56.5 million and includes a S$7.6 million interest rate derivatives facility, a S$20.0 million advance facility, a S$27.4 million refinancing facility and a S$1.5 million banker’s guarantee. This credit facility was amended on October 16, 2019, to, among other things, provide for a S$5.0 million foreign exchange facility and reduce the S$7.6 million interest rate derivatives facility to S$3.5 million.

On October 16, 2019 and March 18, 2020, TDCX SG drew down loans of S$10.0 million and S$7.0 million respectively from the advance facility. The facility bears an interest rate of 1.25% per annum over the prevailing cost of funds for the financial institution lender (as determined by the financial institution lender). The loan is repayable on demand.

On April 30, 2020, TDCX SG entered into a temporary bridging loan agreement with the same financial institution lender and subsequently on July 30, 2020, TDCX SG drew down a principal amount of S$5.0 million. The facility bears an interest rate of 2.5% per annum. The bank loan is denominated in Singapore Dollar with 53 equal monthly repayments commencing on March 1, 2021 and matures on August 1, 2025. No repayment has been made during the year ended December 31, 2020. Bank loans approximate fair value as at end of reporting period.

The bank loans are secured by:

 

  (a)

Personal guarantee from a director;

 

  (b)

Guarantee from TDCXH ;

 

  (c)

Charge over a subsidiary’s pledged bank deposits;

 

  (d)

Charge over shares of TDCX SG and a subsidiary in Malaysia;

 

  (e)

Deed of subordination; and

 

  (f)

Fixed and floating charge over all present and future assets by way of debenture.

The bank loans contain covenants which requires TDCXH and TDCX SG to maintain the following:

 

  (a)

TDCX SG’s tangible net worth of not less than S$16 million;

 

  (b)

A ratio of TDCX SG’s total indebtedness to tangible net worth of not more than 1.5 times;

 

  (c)

TDCXH’s consolidated tangible net worth of not less than S$42 million;

 

  (d)

A ratio of TDCXH’s consolidated total indebtedness to consolidated tangible net worth of not more than 1.5 times;

 

  (e)

TDCXH’s consolidated debt service coverage ratio of not less than 3 times.; and

 

  (f)

TDCX SG shall not declare dividends in excess of 50% of its net profit after tax through the tenure facilities.

In 2019, TDCX SG distributed dividends in excess of 50% of its net profit after tax, which caused a breach of the covenants for the bank loan facility. The Group has obtained a written waiver of this breach from the bank subsequent to the end of the financial year. As a result of the breach and subsequent receipt

 

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Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

of the waiver obtained on March 2, 2020, TDCX SG did not have an unconditional right to defer the settlement as of December 31, 2019 and accordingly, has classified its total bank loan amounting to S$34.4 million to current liability in the consolidated balance sheet as of December 31, 2019.

On September 2, 2020, TDCX SG obtained a loan covenant waiver from the bank to waive the restriction to distribute dividends in excess of 50% of its net profit after tax, allowing TDCX SG to declare and pay dividends of up to 100% of its 2020 annual consolidated net profit after tax. The Group was in compliance with its financial covenants for the year ended December 31, 2020.

Reconciliation of liabilities arising from financing activities

The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s statement of cash flows as cash flows from financing activities.

 

     Amount due to
a director
    Bank loans      Lease
liabilities

(Note 18)
 
     S$’000     S$’000      S$’000  

At January 1, 2019

     10,469       30,547        20,129  

Financing cash flow

     (10,474     2,409        (11,590

Bank facility fee expense

     —         55        —    

Non-cash changes:

       

- Accrued interest

     —         1,410        1,383  

- Additions to lease liabilities

     —         —          15,339  

- Early termination of lease

     —         —          (155

- Currency alignment

     5       —          355  
  

 

 

   

 

 

    

 

 

 

At December 31, 2019

     —         34,421        25,461  

Financing cash flow

     —         4,496        (14,225

Bank facility fee expense

     —         54        —    

Non-cash changes:

       

- Accrued interest

     —         1,335        1,559  

- Additions to lease liabilities

     —         —          22,837  

- Early termination of lease

     —         —          (2,870

- Rent concession

     —         —          (521

- Currency alignment

     —         —          246  
  

 

 

   

 

 

    

 

 

 

At December 31, 2020

     —         40,306        32,487  
  

 

 

   

 

 

    

 

 

 

 

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Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

18

Lease liabilities

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  
Minimum lease payments      

Amounts due for settlement within 12 months (shown under current liabilities)

     14,664        10,963  

Amounts due for settlement after 12 months and not later than 5 years

     17,823        14,498  
  

 

 

    

 

 

 
     32,487        25,461  
  

 

 

    

 

 

 

The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the Group’s treasury function. Lease liabilities approximate fair value as at end of reporting period.

As discussed in Note 2, the Group has derecognized S$0.5 million of the lease liability that has been extinguished by the forgiveness of lease payments on leased office space.

 

19

Provision for reinstatement cost

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

At beginning of year

     4,955        1,817  

Additions

     899        3,064  

Accretion, recognized in finance cost

     140        100  

Payment for reinstatement

     —          (66

Currency alignment

     75        40  
  

 

 

    

 

 

 

At end of year

     6,069        4,955  
  

 

 

    

 

 

 

Analysed as:

     

Current

     452        —    

Non-current

     5,617        4,955  
  

 

 

    

 

 

 
     6,069        4,955  
  

 

 

    

 

 

 

The provision is made based on management’s best estimate for the reinstatement cost for its leasehold improvements, taking into account recent quotes received from contractors and is carry at its approximate fair value as at end of reporting period. The provision is recognized as an addition to leasehold improvements (Note 13) and is depreciated over its estimated useful lives.

 

20

Defined benefit obligation

A subsidiary in the Philippines is a participant in an unfunded, non-contributory defined benefit multi-employer retirement plan. The subsidiary provides for a defined benefit plan for all qualifying employees. The normal retirement shall accrue to the employee upon reaching retirement age of 60 with at least 5 years of credited service. All employee may retire early with the consent of the subsidiary upon reaching the age of 50 and has completed at least 10 years of credited service.

 

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Table of Contents

TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

A subsidiary in Thailand has obligations in respect of the severance payments they must make to employees upon retirement under labour law. The subsidiary treats these severance payment obligations as a defined benefit plan.

 

21

Deferred tax assets/liabilities

 

     December 31,
2020
     December 31,
2019
 
     S$’000      S$’000  

Deferred tax assets

     1,580        1,197  

Deferred tax liabilities

     (129      (236
  

 

 

    

 

 

 
     1,451        961  
  

 

 

    

 

 

 

Following are the major deferred tax liabilities and assets recognized by the Group:

 

     Provisions      Accelerated
tax
depreciation
     Others      Total  
     S$’000      S$’000      S$’000      S$’000  

At January 1, 2019

     579        (620      5        (36

Credit to profit or loss (Note 27)

     124        501        379        1,004  

Overprovision in prior years (Note 27)

     (101      71        —          (30

Currency alignment

     —          23        —          23  
  

 

 

    

 

 

    

 

 

    

 

 

 

At December 31, 2019

     602        (25      384        961  

Credit to profit or loss (Note 27)

     538        70        (51      557  

Overprovision in prior years (Note 27)

     (67      —          —          (67

Currency alignment

     5        (11      6        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

At December 31, 2020

     1,078        34        339        1,451  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

22

Share capital

The issued share capital of the Company is US$1 consisting of 123,500,000 ordinary share of US$0.0001 par value. The share is fully paid, carries one vote per share and a right to dividends as and when declared by the Company.

 

23

Non-controlling interests

On September 19, 2018, TDCXH acquired 40% paid-up share capital in TDCX SG from the non-controlling interest shareholder, which comprised an aggregate of 0.8 million ordinary shares for a total consideration of S$38 million. The transaction has been treated as an equity transaction between shareholders with the difference between the consideration and the book value of the equity interest in TDCX SG recorded in other reserve (Note 30).

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

24

Revenue

 

     2020      2019      2018  
     S$’000      S$’000      S$’000  

Over time

        

Omnichannel CX solutions

     283,427        217,349        120,238  

Sales and digital marketing

     66,235        46,839        43,124  

Content monitoring and moderation

     80,170        61,526        14,361  

Workspace and payroll services

     4,409        4,007        2,520  
  

 

 

    

 

 

    

 

 

 
     434,241        329,721        180,243  
  

 

 

    

 

 

    

 

 

 

At a point in time

        

Other services

     482        544        990  
  

 

 

    

 

 

    

 

 

 
     434,723        330,265        181,233  
  

 

 

    

 

 

    

 

 

 

 

25

Profit for the year

Profit for the year has been arrived at after charging (crediting):

 

     2020     2019     2018  
     S$’000     S$’000     S$’000  

Defined contribution plan

     8,828       6,759       4,932  

Wages, salaries, bonus and other benefits

     246,724       180,707       103,599  

Gain on disposal of a subsidiary

     731       —         —    

Share of profit from an associate

     196       —         —    

Finance costs:

      

Interest on bank loans

     1,344       1,410       403  

Interest expense on lease liabilities

     1,559       1,383       725  

Accretion on provision for reinstatement cost

     141       100       —    

Others

     14       —         —    

Professional fees

     6,135       1,661       773  

Forfeiture of office lease deposit

     1,094       —         —    

Gain on early termination of right-of-use assets

     (171     (21     —    

Utilities expense (included in other operating expenses)

     1,953       2,080       988  

Foreign exchange loss—net (included in other operating expenses)

     1,753       2,118       9  
  

 

 

   

 

 

   

 

 

 

 

26

Other operating income

 

     2020      2019      2018  
     S$’000      S$’000      S$’000  

Government grant and credit scheme subsidies

     6,311        543        400  

Rent concessions

     521        —          —    

Interest income from an associate

     55        —          —    

Others

     627        174        146  
  

 

 

    

 

 

    

 

 

 
     7,514        717        546  
  

 

 

    

 

 

    

 

 

 

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

In 2020, the Group received wage support for local employees under the Jobs Support Scheme (“JSS”) amounting to S$6.3 million from the Singapore Government as part of the Government’s measures to support businesses during the period of economic uncertainty impacted by COVID-19. Grant income is recognized in profit or loss on a systematic basis over the period of uncertainty in which the related salary costs for which the grant is intended to compensate is recognised as expenses.

 

27

Income tax expenses

 

     2020     2019     2018  
     S$’000     S$’000     S$’000  

Income tax:

      

Current year

     19,488       7,986       3,504  

(Over) Under provision of prior years

     (69     181       (54
  

 

 

   

 

 

   

 

 

 
     19,419       8,167       3,450  

Deferred tax:

      

Current year (Note 21)

     (557     (1,004     (43

Under provision of prior years (Note 21)

     67       30       29  
  

 

 

   

 

 

   

 

 

 
     (490     (974     (14

Foreign withholding tax

     2,374       331       84  
  

 

 

   

 

 

   

 

 

 
     21,303       7,524       3,520  
  

 

 

   

 

 

   

 

 

 

The income tax expense varied from the amount of income tax expense determined by applying the Singapore income tax rate of 17% (2019: 17%, 2018: 17%) to profit before income tax as a result of the following differences:

 

     2020     2019     2018  
     S$’000     S$’000     S$’000  

Profit before income tax

     107,397       81,060       41,608  
  

 

 

   

 

 

   

 

 

 

Tax at the domestic income tax rate

     18,258       13,780       7,073  

Tax effect of expenses that are not deductible in determining taxable profit

     2,099       834       23  

(Over) Under provision in prior years

     (2     211       (25

Tax exempt income (Note A)

     (2,274     (7,004     (3,004

Effect of different tax rates of subsidiaries operating in other jurisdictions

     (45     (987     (1,140

Deferred tax asset not recognized

     1,263       1,100       453  

Previously unrecognized and unused tax losses now recognized as deferred tax assets

     —         (403     —    

Utilization of tax losses previously not recognized as deferred tax asset

     (364     (279     —    

Foreign withholding tax

     2,374       331       84  

Others

     (6     (59     56  
  

 

 

   

 

 

   

 

 

 

Tax expense for the year

     21,303       7,524       3,520  
  

 

 

   

 

 

   

 

 

 

 

  Note A:

Tax exempt income represent income of subsidiaries located in Singapore, Malaysia and Philippines that benefit from tax holiday. Refer to below for additional information on those subsidiaries tax holidays.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

The Group entities have unutilized tax losses carry forward available for offsetting against future taxable income as follows:

 

     2020     2019     2018  
     S$’000     S$’000     S$’000  

Tax losses carry forward

      

Amount at beginning of year

     7,004       4,431       4,039  

Utilized during the year

     (2,142     (1,131     (78

Recognized as deferred tax

     —         (1,612     —    

Arising during the year

     6,095       5,316       470  
  

 

 

   

 

 

   

 

 

 

Amount at end of year

     10,957       7,004       4,431  
  

 

 

   

 

 

   

 

 

 

Deferred tax asset on above unrecorded

     2,363       1,100       523  
  

 

 

   

 

 

   

 

 

 

No deferred tax asset has been recognized in respect of the tax losses carried forward from certain subsidiaries due to the uncertainty of future profit streams. The realization of the future income tax benefits from tax losses carried forwards is available for an unlimited future period subject to the compliance with conditions imposed by law and the relevant tax authorities.

A subsidiary in Malaysia was awarded the Multimedia Super Corridor status in 2005 by the Ministry of Finance and Ministry of International Trade and Industry Malaysia, which entitles the subsidiary to enjoy customized tax incentive scheme. The scheme allows partial tax exemption for the subsidiary on the statutory income earned from its core operations for a certain period. The scheme was extended and customized for 5 years in 2015, and has expired on January 18, 2020. The subsidiary is currently in the process of obtaining the extension from Ministry of Finance and Ministry of International Trade and Industry Malaysia. The subsidiary has recognized income tax expense.

A subsidiary in Philippines was registered as a PEZA Ecozone Information Technology (Export) Enterprise granted by the Philippine Economic Zone Authority (“PEZA”) which avails the subsidiary to the Income Tax Holiday (“ITH”) for a period of 4 years from the commencement of operations at the initial operational site in 2015. The ITH period can be further extend up to 2 years with application to PEZA when stipulated conditions are met. On April 2020, the subsidiary was granted an extension of ITH to March 2020. The extension of the ITH expired in March 2020 and the subsidiary has submitted an application for extension of the ITH. Despite the income tax holiday having expired in March 2020 for one of the approved sites the subsidiary continued to claim the tax benefits as management has assessed that it is more likely than not that an extension will be granted. If the subsidiary does not receive the extension, the Group would have incurred additional income tax expenses of S$0.4 million for the year ended December 31, 2020.

Had the Group not enjoyed income tax holidays for the years ended December 31, 2018, 2019 and 2020, the increase in income tax expenses and resulting basic and diluted earnings per share amounts would have been as follows:

 

     2020      2019      2018  
     S$’000      S$’000      S$’000  

Increase in income tax expenses

     2,083        8,017        3,950  
  

 

 

    

 

 

    

 

 

 

 

     2020      2019      2018  
     S$’000      S$’000      S$’000  

Basic and diluted earnings per share

     0.68        0.53        0.25  
  

 

 

    

 

 

    

 

 

 

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

28

Basic and diluted earnings per share

The calculation of the basic and diluted earnings per share attributable to the shareholders of the Group is based on the following data:

 

    2020     2019     2018  
    S$’000     S$’000     S$’000  

Earnings

     

Earnings for the purposes of basic and diluted earnings per share (profit for the year attributable to owners of the Group)

    86,093       73,535       35,271  
 

 

 

   

 

 

   

 

 

 

 

    2020     2019     2018  

Number of shares

     

Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share (Note 34)

    123,500,000       123,500,000       123,500,000  
 

 

 

   

 

 

   

 

 

 

 

    2020     2019     2018  
    S$     S$     S$  

Basic and diluted earnings per share

    0.70       0.60       0.31  
 

 

 

   

 

 

   

 

 

 

 

29

Dividends

Tax-exempt dividends of S$73.5 million per ordinary share totaling S$73.5 million (2019: S$17 million, 2018: S$3 million) in respect of the year ended December 31, 2020 (2019: December 31, 2019,2018: December 31, 2018 were paid.

 

30

Reserves

Reserves comprise of:

 

  (a)

Translation reserves

Exchange differences relating to the translation of the net assets of the Group’s foreign operations, which relate to subsidiaries only, from their functional currency into the Group’s presentation currency, being Singapore Dollars, are recognized directly in the translation reserves.

 

  (b)

Legal reserves

Legal reserve arose from:

 

   

a subsidiary in Thailand whereby, according to the Civil and Commercial Code of Thailand, an entity must appropriate at least one-twentieth of the profit arising from the business of the entity to a legal reserve at each distribution of dividend, until the legal reserve reaches one-tenth of the capital of the entity. Such legal reserve is not available for distribution as dividend until the entity is finally wound up.

 

   

subsidiaries in People’s Republic of China (“PRC”) whereby, accordingly to the laws applicable to the PRC Domestic Enterprises and PRC Foreign Investment Enterprises, the PRC subsidiaries must make annual appropriations of not less than 10% of after-tax profit from after-tax profit to non-distributable statutory reserve. These reserve funds can only be used for specific purposes and are not distributable as cash dividends.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

  (c)

Other reserves

On September 19, 2018, TDCXH acquired 40% paid-up share capital in TDCX SG from the non-controlling interest holder, which comprised an aggregate of 0.8 million ordinary shares for a total consideration of S$38 million. The transaction has been treated as an equity transaction between shareholders with the difference between the consideration and the book value of the equity interest in TDCX SG recorded in other reserve.

On December 22, 2020, the Founder transferred his 100% equity interest in TDCXH to TDCX KY for a consideration of S$2. The transaction has been treated as an equity transaction between shareholders with the difference between the consideration and the book value of the equity interest in TDCXH recorded in other reserve.

On March 23, 2021, the Founder transferred his 100% equity interest in TDCX KY to TDCX. The transaction has been treated as an equity transaction under common control. Refer to Note 1 for further details.

 

31

Restricted net assets

Some of TDCX’s consolidated subsidiaries have certain restrictions on their ability to pay dividends or make intercompany loans and advances pursuant to the following legal restrictions and financing arrangements:

 

  (1)

PRC legal restrictions permit payments of dividends by TDCX’s PRC subsidiaries only out of their retained earnings, if any, determined in accordance with PRC regulations.

 

  (2)

Other legal restrictions for the subsidiaries in PRC and Thailand for the distribution of dividend. Refer to Note 30(b) for further details.

 

  (3)

Refer to Note 17 for the bank loan covenants for the restrictions.

The balance of restricted net assets TDCX’s consolidated subsidiaries held was S$72.4 million as at December 31, 2020.

 

32

Segmental reporting

Information reported to the Group’s chief operating decision maker (“CODM”), who are directors of the Group, in order to allocate resources and assess its performance, and for which discrete financial information is available, is based on each business unit’s performance located in each country where a set of similar services are offered. Country directors (i.e. segment managers) are responsible for performance of the respective country’s business units and are directly accountable to the Group’s CODM.

Based on an overall evaluation of all facts and circumstances, and after combining operating segments with similar economic characteristics that comply with the aggregation criteria specified in IFRS 8 Operating segments, the Group has determined that it operates as a single reportable segment. The information below includes information about the Group’s products and services, geographical areas, and major customers.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

     2020      2020      2019      2018  
     US$’000      S$’000      S$’000      S$’000  

Revenue

           

Omnichannel CX solutions

     210,820        283,427        217,349        120,238  

Sales and digital marketing

     49,267        66,235        46,839        43,124  

Content monitoring and moderation

     59,633        80,170        61,526        14,361  

Workspace, payroll and other services

     3,638        4,891        4,551        3,510  
  

 

 

    

 

 

    

 

 

    

 

 

 
     323,358        434,723        330,265        181,233  
  

 

 

    

 

 

    

 

 

    

 

 

 

Analysis of revenue and carrying amount of non-current asset by geography

The Group presents revenue by geographical location based on which office delivers the service, irrespective of the location of the customer engaging the Group’s services or location of the customer that the Group is interacting with.

 

     Revenue      Non-current assets  
     2020      2020      2019      2018      December 31,
2020
     December 31,
2019
 
     US$’000      S$’000      S$’000      S$’000      S$’000      S$’000  

Singapore

     90,049        121,062        96,175        64,257        5,427        10,916  

Philippines

     81,276        109,268        84,169        49,946        29,621        25,800  

Malaysia

     84,035        112,976        82,795        48,420        11,246        10,599  

Thailand

     40,304        54,185        41,445        12,961        11,317        11,884  

China

     8,554        11,500        16,099        3,927        2,606        3,410  

Japan

     16,929        22,759        9,008        1,722        836        1,205  

Spain

     2,211        2,973        574        —          2,449        186  

India

     —          —          —          —          3,745        —    

Colombia

     —          —          —          —          3,224        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     323,358        434,723        330,265        181,233        70,471        64,000  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Information about major customers

During the year, the Group had revenue transactions with major customers that amounted to more than 10% of the Group’s revenue as follows:

 

     2020      2019      2018  
     S$’000      S$’000      S$’000  

Customer

        

A

     160,625        100,988        58,111  

B

     102,003        116,550        36,188  

C

     54,585        40,832        24,890  

D

     *        *        24,690  
  

 

 

    

 

 

    

 

 

 
     317,213        258,370        143,879  
  

 

 

    

 

 

    

 

 

 

 

  *

Represents less than 10% of the Group’s revenue in 2020 and 2019.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

33

Commitments

Lease commitments for leases of low-value assets are as follows:

 

     2020      2019      2018  
     S$’000      S$’000      S$’000  

Payable within one year

     11,233        3,336        869  

Payable in the second to fifth year inclusive

     3,775        3,766        1,134  
  

 

 

    

 

 

    

 

 

 
     15,008        7,102        2,003  
  

 

 

    

 

 

    

 

 

 

 

34

Events after the reporting period

 

  (1)

On March 23, 2021, TDCX acquired 100% of TDCX KY from the Founder as disclosed in Note 1. As part of this transaction, TDCX entered into a term loan credit facility agreement with a third party financial institution on March 16, 2021. The credit facility provides for borrowings in an aggregate amount of US$188 million. Contemporaneous with TDCX’s acquisition of the Founder’s shareholder interests in TDCX KY, TDCX drew upon the credit facility on March 23, 2021 and subsequently distributed all US$188 million of the proceeds to the Founder (the “2021 Loan”). The 2021 Loan carries interest rate of 3.15% above 3-month London interbank offered rate (“LIBOR”) for the first 18 months and 3.45% above 3-month LIBOR subsequently. The 2021 Loan is scheduled to be repaid on March 23, 2023, with an option to extend for 12 months. If the repayment term is extended for an additional 12 months, the loan shall be repaid in three instalments with the first instalment (being 25% of the outstanding principal) due 24 months after the drawdown of the loan, the second instalment (being a further 25% of the outstanding principal) due 30 months after the drawdown of the loan and the final instalment (the remaining outstanding balance) due 36 months after the drawdown of the loan. The 2021 Loan is guaranteed by TDCXH and TDCX KY and secured by a mortgage of the Founder’s shares in TDCX. Additionally, the Founder is required to maintain an amount equal to 80% of the amount outstanding under the 2021 Loan deposited in a collaterized bank account with the third party financial institution.

The acquisition of TDCX KY by TDCX was accounted for in a manner similar to a pooling of interests as disclosed in Note 1.

The 2021 Loan and related payment to the Founder are considered non-adjusting events after the reporting period and do not impact the Group’s consolidated financial statements as of and for the year ended December 31, 2020.

 

  (2)

On May 21, 2021, TDCX completed the following transactions which resulted in the increase in number of issued ordinary shares from one ordinary share to 123,500,000 ordinary shares:

 

  (i)

A share split pursuant to which the one ordinary share was sub-divided into 10,000 ordinary shares; and

 

  (ii)

An issuance of additional 123,490,000 ordinary shares for a nominal consideration of US$12,349. Such issuance was accounted for as a share split.

All references in the accompanying financial statements and related notes to the number of ordinary shares and per share data have been revised on a retroactive basis for all periods presented to reflect the effect of the above transactions.

 

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TDCX Inc. and its Subsidiaries (formerly known as TDCX Capital Pte Ltd)

Notes to Consolidated Financial Statements

 

35

Restatement

Subsequent to the issuance of the Group’s 2018 and 2019 financial statements, the Group determined that it had misclassified its cash outflow of S$38 million paid to acquire 40% paid-up capital in TDCX SG from non-controlling interests holder as investing activities in the consolidated statement of cash flows for the year ended December 31, 2018. As a result, the Group’s previously issued consolidated statement of cash flows for the year ended December 31, 2018 has been restated from the amounts previously reported to reflect the cash consideration paid to acquire non-controlling interests as cash flow from financing activities.

The effect of the restatement is as follows:

 

     As              
     previously           As  
     reported     Adjustment     restated  
     S$’000     S$’000     S$’000  

Statement of cash flows for the year ended December 31, 2018

      

Cash used in investing activities

     (58,863     38,000       (20,863

Net cash from (used in) financing activities

     27,320       (38,000     (10,680
  

 

 

   

 

 

   

 

 

 

 

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Table of Contents

Additional Information Financial Statement Schedule I

Condensed Financial Information of Parent Company

Statements of Financial Position

 

     December 31,
2020
    December 31,
2020
    December 31,
2019
 
     US$’000     S$’000     S$’000  

Assets

      

Non-current assets

      

Investment in subsidiaries

     83,701       112,528       99,444  
  

 

 

   

 

 

   

 

 

 

Total assets

     83,701       112,528       99,444  
  

 

 

   

 

 

   

 

 

 

Equity

      

Share capital

     *       *       *  

Reserve

     (14,760     (19,843     (20,650

Retained earnings

     98,461       132,371       120,094  
  

 

 

   

 

 

   

 

 

 

Total equity

     83,701       112,528       99,444  
  

 

 

   

 

 

   

 

 

 

 

*

Amount is less than S$1,000

 

F-48


Table of Contents

Additional Information Financial Statement Schedule I

Condensed Financial Information of Parent Company

Statement of Profit or Loss and Other Comprehensive Income

 

     2020      2020      2019      2018  
     US$’000      S$’000      S$’000      S$’000  
     (Note 4)                       

Share of profit from its subsidiaries

     63,904        85,912        73,421        35,319  
  

 

 

    

 

 

    

 

 

    

 

 

 

Profit before tax

     63,904        85,912        73,421        35,319  

Income tax expense

     —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Profit for the year, representing total comprehensive income for the year

     63,904        85,912        73,421        35,319  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

F-49


Table of Contents

Additional Information Financial Statement Schedule I

Condensed Financial Information of Parent Company

Statement of Cash Flows

 

     2020     2020     2019     2018  
     US$’000     S$’000     S$’000     S$’000  
     (Note 4)                    

Operating activities

        

Profit before income tax

     63,904       85,912       73,421       35,319  

Adjustment to reconcile net profit to net cash generated from operating activities

        

Investment in subsidiaries

     (63,904     (85,912     (73,421     (35,319
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in operating activities

     —         —         —         —    

Investing activity

        

Net cash used in investing activity

     —         —         —         —    

Financing activity

        

Net cash used in financing activity

     —         —         —         —    

Net increase in cash and cash equivalent

     —         —         —         —    

Cash and cash equivalents at beginning of year

     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of year

     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

 

F-50


Table of Contents

Additional Information Financial Statement Schedule I

Condensed Financial Information of Parent Company

Notes of the Condensed Financial Statements

 

1.

Organisation and principal activities

In anticipation of an initial listing in the United States, the Company was incorporated under the laws of the Cayman Islands on April 16, 2020 as the holding company for acquiring the shares of TDCX KY. The Company has no operations.

 

2.

Basis for preparation

The condensed financial information of the Company has been prepared using the same accounting policies as set out in the Group’s consolidated financial statements.

 

3.

Investments in subsidiaries

The Company and its subsidiaries were included in the consolidated financial statements where the inter-company transactions and balances were eliminated upon consolidation. For the purpose of the Company’s stand-alone financial statements, its investments in subsidiaries were reported using the equity method of accounting. The Company’s share of income from its subsidiaries were reported as equity in earnings of subsidiaries in the accompanying parent Company financial statements.

 

4.

Convenience translation

The condensed financial information of the Company are presented in Singapore Dollar. The translations of Singapore Dollar amounts into USD for the financial statements for the year ended December 31, 2020 are included solely for the convenience of readers outside Singapore and have been made at the rate of S$1.3444 to US$1, the approximate rate of exchange at June 30, 2021. Such translations should not be construed as representations that the Singapore Dollar amounts could be converted into USD at that or any other rate.

 

5.

Share capital

The issued share capital of the Company is US$1 consisting of 123,500,000 ordinary share. The share is fully paid, carries one vote per share and a right to dividends as and when declared by the Company.

 

6.

Events after the reporting period

 

  (1)

The Company entered into a term loan credit facility agreement with a third party financial institution on March 16, 2021. The credit facility provides for borrowings in an aggregate amount of US$188 million. Contemporaneous with the Company’s acquisition of the Founder’s shareholder interests in TDCX KY, the Company drew upon the credit facility on March 23, 2021 and subsequently distributed all US$188 million of the proceeds to the Founder (the “2021 Loan”). The 2021 Loan carries interest rate of 3.15% above 3-month London interbank offered rate (“LIBOR”) for the first 18 months and 3.45% above 3-month LIBOR subsequently. The 2021 Loan is scheduled to be repaid on March 23, 2023, with an option to extend for 12 months. If the repayment term is extended for an additional 12 months, the loan shall be repaid in three instalments with the first instalment (being 25% of the outstanding principal) due 24 months after the drawdown of the loan, the second instalment (being a further 25% of the outstanding principal) due 30 months after the drawdown of the loan and the final instalment (the remaining outstanding balance) due 36 months after the drawdown of the loan. The 2021 Loan is guaranteed by TDCXH and TDCX KY and secured by a mortgage of the Founder’s shares in TDCX. Additionally, the

 

F-51


Table of Contents

Additional Information Financial Statement Schedule I

Condensed Financial Information of Parent Company

Notes of the Condensed Financial Statements

 

 

Founder is required to maintain an amount equal to 80% of the amount outstanding under the 2021 Loan deposited in a collaterized bank account with the third party financial institution.

The 2021 Loan and related payment to the Founder are considered non-adjusting events after the reporting period and do not impact the Company’s financial statements as of and for the year ended December 31, 2020.

 

  (2)

On May 21, 2021, TDCX completed the following transactions which resulted in the increase in number of issued ordinary shares from one ordinary share to 123,500,000 ordinary shares:

 

  (i)

A share split pursuant to which the one ordinary share was sub-divided into 10,000 ordinary shares; and

 

  (ii)

An issuance of additional 123,490,000 ordinary shares for a nominal consideration of US$12,349. Such issuance was accounted for as a share split.

All references in the accompanying financial statements and related notes to the number of ordinary shares and per share data have been revised on a retroactive basis for all periods presented to reflect the effect of the above transactions.

 

F-52


Table of Contents

 

TDCX Inc. and its Subsidiaries

(Registration No. 362018)

Unaudited Condensed Interim Consolidated Financial Statements

As of June 30, 2021 and for the Six Months Ended June 30, 2021 and 2020

 

 

 

 

F-53


Table of Contents

TDCX Inc. and its Subsidiaries

Unaudited Condensed Interim Consolidated Financial Statements

CONTENTS

 

     Page  

Unaudited condensed interim consolidated statements of financial position

     F-55  

Unaudited condensed interim consolidated statements of profit or loss and other comprehensive income

     F-56  

Unaudited condensed interim consolidated statements of changes in equity

     F-57  

Unaudited condensed interim consolidated statements of cash flows

     F-58 - F-59  

Notes to the condensed interim consolidated financial statements

     F-60 - F-68  

 

F-54


Table of Contents

TDCX Inc. and its Subsidiaries

Unaudited Condensed Interim Consolidated Statements of Financial Position as at June 30, 2021 and December 31, 2020

 

     Note      June 30,
2021
    June 30,
2021
    December 31,
2020
 
            US$’000     S$’000     S$’000  
            (Note 2)              

ASSETS

         

Current assets

         

Cash and cash equivalents

        60,370       81,162       59,807  

Fixed deposits

        5,655       7,602       7,727  

Trade receivables

     3        34,816       46,806       36,919  

Contract assets

        37,858       50,897       46,842  

Other receivables

        8,985       12,080       12,257  
     

 

 

   

 

 

   

 

 

 

Total current assets

        147,684       198,547       163,552  
     

 

 

   

 

 

   

 

 

 

Non-current assets

         

Pledged deposits

        1,766       2,374       2,377  

Other receivables

        3,389       4,558       5,874  

Plant and equipment

     4        35,344       47,516       40,581  

Right-of-use assets

        21,024       28,265       29,221  

Deferred tax assets

        1,810       2,433       1,580  

Investment in an associate

        193       260       229  
     

 

 

   

 

 

   

 

 

 

Total non-current assets

        63,526       85,406       79,862  
     

 

 

   

 

 

   

 

 

 

Total assets

        211,210       283,953       243,414  
     

 

 

   

 

 

   

 

 

 

LIABILITIES AND (CAPITAL DEFICIENCY) NET EQUITY

 

   

Current liabilities

         

Other payables

     5        28,111       37,794       37,200  

Bank loans

     6        18,703       25,144       24,170  

Lease liabilities

     7        10,512       14,132       14,664  

Provision for reinstatement cost

        2,767       3,720       452  

Income tax payable

        9,209       12,381       13,257  
     

 

 

   

 

 

   

 

 

 

Total current liabilities

        69,302       93,171       89,743  
     

 

 

   

 

 

   

 

 

 

Non-current liabilities

         

Bank loans

     6        196,303       263,910       16,136  

Lease liabilities

     7        12,822       17,238       17,823  

Provision for reinstatement cost

        3,374       4,536       5,617  

Defined benefit obligation

        1,282       1,723       1,435  

Deferred tax liabilities

        105       141       129  
     

 

 

   

 

 

   

 

 

 

Total non-current liabilities

        213,886       287,548       41,140  
     

 

 

   

 

 

   

 

 

 

Capital, reserves and non-controlling interests

         

Share capital

     8        12       16       *  

Reserves

     14        (203,616     (273,741     (19,843

Retained earnings

        131,756       177,133       132,371  
     

 

 

   

 

 

   

 

 

 

(Deficit) Equity attributable to owners of the Group

        (71,848     (96,592     112,528  

Non-controlling interests

        (130     (174     3  
     

 

 

   

 

 

   

 

 

 

(Capital deficiency) Net equity

        (71,978     (96,766     112,531  
     

 

 

   

 

 

   

 

 

 

Total liabilities and (capital deficiency) net equity

        211,210       283,953       243,414  
     

 

 

   

 

 

   

 

 

 

 

*

Amount is less than S$1,000

See accompanying notes to the unaudited condensed interim consolidated financial statements.

 

F-55


Table of Contents

TDCX Inc. and its Subsidiaries

Unaudited Condensed Interim Consolidated Statements of Profit or Loss and Other Comprehensive Income

For the Six Months Ended June 30, 2021 and June 30, 2020

 

     Note      June 30,
2021
    June 30,
2021
    June 30,
2020
 
            US$’000     S$’000     S$’000  
            (Note 2)              

Revenue

     9        187,174       251,637       209,280  

Employee benefits expense

        (115,610     (155,426     (126,167

Depreciation expense

        (14,757     (19,839     (15,633

Rental and maintenance expense

        (4,223     (5,677     (5,856

Recruitment expense

        (3,358     (4,515     (3,942

Transport and traveling expense

        (396     (533     (670

Telecommunication and technology expense

        (2,916     (3,920     (3,013

Interest expense

        (2,787     (3,747     (1,496

Other operating expense

        (4,569     (6,144     (9,052

Gain on disposal of a subsidiary

        —         —         731  

Share of profit from an associate

        32       43       —    

Interest income

        129       174       245  

Other operating income

     11        2,041       2,744       3,866  
     

 

 

   

 

 

   

 

 

 

Profit before income tax

        40,760       54,797       48,293  

Income tax expenses

     12        (7,464     (10,034     (9,769
     

 

 

   

 

 

   

 

 

 

Profit for the period

     10        33,296       44,763       38,524  

Item that may be reclassified subsequently to profit or loss:

         

Exchange differences on translation of foreign Operations

        (858     (1,153     1,344  
     

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

        32,438       43,610       39,868  
     

 

 

   

 

 

   

 

 

 

Profit attributable to:

         

- Owners of the Group

        33,296       44,763       38,524  

- Non-controlling interests

        —         —         —    
     

 

 

   

 

 

   

 

 

 
        33,296       44,763       38,524  
     

 

 

   

 

 

   

 

 

 

Total comprehensive income attributable to:

         

- Owners of the Group

        32,438       43,610       39,868  

- Non-controlling interests

        —         —         —    
     

 

 

   

 

 

   

 

 

 
        32,438       43,610       39,868  
     

 

 

   

 

 

   

 

 

 

Basic and diluted earnings per share (in US$ or S$)

     13        0.27       0.36       0.31  
     

 

 

   

 

 

   

 

 

 

Weighted average number of ordinary shares used in computing basic and diluted earnings per share

        123,500,000       123,500,000       123,500,000  
     

 

 

   

 

 

   

 

 

 

See accompanying notes to the unaudited condensed interim consolidated financial statements.

 

F-56


Table of Contents

TDCX Inc. and its Subsidiaries

Unaudited Condensed Interim Consolidated Statements of Changes in Equity

For the Six Months Ended June 30, 2021 and June 30, 2020

 

     Share
capital
     Foreign
exchange
translation
reserve
    Reserves
(Note 14)
    Retained
earnings
     Equity
attributable to
owners of the
of the Group
     Non-
controlling
interests
     Total  
     S$’000      S$’000     S$’000     S$’000      S$’000      S$’000      S$’000  

Balance at January 1, 2020

     *        (2,024     (18,626     120,094        99,444        2        99,446  

Total comprehensive income for the period:

                  

Profit for the period

     —          —         —         38,524        38,524        —          38,524  

Other comprehensive income

     —          1,344       —         —          1,344        —          1,344  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total

     —          1,344       —         38,524        39,868        —          39,868  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Balance at June 30, 2020

     *        (680     (18,626     158,618        139,312        2        139,314  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

 

     Share
capital
     Foreign
exchange
translation
reserve
    Reserves
(Note 14)
    Retained
earnings
    Equity
(Capital
deficiency)
attributable to
owners of the
of the Group
    Non-
controlling
interests
    Total  
     S$’000      S$’000     S$’000     S$’000     S$’000     S$’000     S$’000  

Balance at January 1, 2021

     *        (1,307     (18,536     132,371       112,528       3       112,531  

Total comprehensive income for the period:

               

Issuance of share capital

     16        —         —         —         16       —         16  

Transfer to legal reserve

     —          —         1       (1     —         —         —    

Profit for the period

     —          —         —         44,763       44,763       —         44,763  

Other comprehensive income

     —          (1,153     —         —         (1,153     —         (1,153
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     16        (1,153     1       44,762       43,626       —         43,626  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transaction with owners recognized directly in equity:

               

Distribution to Founder

     —          (714     (252,032     —         (252,746     —         (252,746

Dividend paid to non-controlling interest

     —          —         —         —         —         (177     (177
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     —          (714     (252,032     —         (252,746     (177     (252,923
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2021

     16        (3,174     (270,567     177,133       (96,592     (174     (96,766
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Amount is less than S$1,000

See accompanying notes to the unaudited condensed interim consolidated financial statements.

 

F-57


Table of Contents

TDCX Inc. and its Subsidiaries

Unaudited Condensed Interim Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2021 and June 30, 2020

 

     June 30,
2021
    June 30,
2021
    June 30,
2020
 
     US$’000     S$’000     S$’000  
     (Note 2)              

Operating activities

      

Profit before income tax

     40,760       54,797       48,293  

Adjustments for:

      

Depreciation expense

     14,757       19,839       15,633  

Bank transaction fees

     183       246       27  

Interest income

     (129     (174     (245

Interest expense

     2,787       3,747       1,496  

Remeasurement of retirement benefit obligation

     233       313       234  

Gain on early termination of right-of-use assets

     (63     (85     (144

Gain on disposal of a subsidiary

     —         —         (731

Loss on disposal of plant and equipment

     10       13       —    

Share of profit from an associate

     (32     (43     —    
  

 

 

   

 

 

   

 

 

 

Operating cash flows before movements in working capital

     58,506       78,653       64,563  

Trade receivables

     (7,583     (10,194     25,198  

Contract assets

     (3,560     (4,786     (5,215

Other receivables and prepaid expenses

     870       1,170       (1,531

Other payables

     134       181       1,202  
  

 

 

   

 

 

   

 

 

 

Cash generated from operations

     48,367       65,024       84,217  

Interest received

     129       174       212  

Income tax paid

     (8,701     (11,697     (498

Income tax refunded

     3       4       13  
  

 

 

   

 

 

   

 

 

 

Net cash from operating activities

     39,798       53,505       83,944  
  

 

 

   

 

 

   

 

 

 

Investing activities

      

Purchase of plant and equipment (Note A)

     (11,941     (16,054     (7,235

Increase of pledged deposits

     (9     (12     —    

Proceeds from disposal of plant and equipment

     34       47       —    

Dividend received from associate

     10       13       —    

Disposal of a subsidiary

     —         —         (9

Repayment from an associate

     —         —         16  
  

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (11,906     (16,006     (7,228
  

 

 

   

 

 

   

 

 

 

 

F-58


Table of Contents

TDCX Inc. and its Subsidiaries

Unaudited Condensed Interim Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2021 and June 30, 2020

 

     June 30,
2021
    June 30,
2021
    June 30,
2020
 
     US$’000     S$’000     S$’000  
     (Note 2)              

Financing activities

      

Dividends paid to non-controlling interest

     (131     (177     —    

Drawdown of bank loan

     187,929       252,651       8,790  

Distribution to founder

     (187,469     (252,032     —    

Repayment of lease liabilities

     (7,375     (9,915     (6,959

Interest paid

     (1,988     (2,673     (753

Repayment of bank loan

     (2,537     (3,410     (3,040

Issue share capital

     12       16       —    
  

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (11,559     (15,540     (1,962
  

 

 

   

 

 

   

 

 

 

Net increase in cash and cash equivalents

     16,333       21,959       74,754  

Effect of foreign exchange rate changes on cash held in foreign currencies

     (449     (604     736  

Cash and cash equivalents at beginning of period

     44,486       59,807       35,920  
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

     60,370       81,162       111,410  
  

 

 

   

 

 

   

 

 

 

Note A:

During the 6 months ended June 30, 2021, the additions to plant and equipment totaling S$18.3 million (June 30, 2020: S$7.2 million) comprises paid purchases totaling S$16.1 million (June 30, 2020: S$7.2 million) and a provision of S$2.2 million (June 30, 2020: S$ Nil) for estimated future reinstatement cost relating to office improvements.

 

See accompanying notes to the unaudited condensed interim consolidated financial statements.

 

F-59


Table of Contents

TDCX Inc. and its Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

 

1

General

TDCX Inc. (“TDCX”) is a company incorporated in the Cayman Islands in April 2020 as TDCX Capital Pte Ltd. In January 2021, it changed its name to TDCX Inc. (“the Company”). TDCX is wholly-owned by Transformative Investments Pte Ltd. The entire interest of Transformative Investments Pte Ltd is held by a trust that was established for the benefit of its founder (the “Founder”) and his family. TDCX and its consolidated subsidiaries (together, the “Group”) mainly provide outsource contact center services comprising sales and digital marketing, omnichannel customer experiences (“CX”) and social media content monitoring and moderation.

TDCX (SG) Pte. Ltd. (“TDCX SG”) and TDCX Holdings Pte. Ltd. (“TDCXH”) are companies incorporated in Singapore in October 1995 and June 1999 respectively. TDCX (KY) Pte. Ltd. (“TDCX KY”) is a Company incorporated in Cayman Islands in January 2020 by the Founder. TDCX SG, TDCXH and TDCX KY are wholly owned consolidated subsidiaries of TDCX as a result of the reorganizations further described below.

Prior to September 2018, TDCX SG was 60% owned by the Founder and 40% owned by a third party. In September 2018, 40% of TDCX SG was acquired by TDCXH by paying cash in an amount of S$38 million. In January 2019, the Founder reduced his 60% equity interest in TDCX SG through cancelation of his shares in TDCX SG and therefore, TDCX SG became a wholly owned subsidiary of TDCXH.

On December 22, 2020, TDCXH was acquired by TDCX KY by paying cash in an amount of S$2 and TDCXH became a wholly owned subsidiary of TDCX KY.

On March 23, 2021, TDCXKY was acquired by TDCX and TDCX KY become a wholly owned subsidiary of TDCX. As TDCX, TDCX KY, TDCXH and TDCX SG were under common control of the Founder during all the periods presented, the acquisitions of TDCX SG and TDCXH by TDCX KY as well as the acquisition of TDCX KY by TDCX were accounted for in a manner similar to a pooling of interest with assets and liabilities all reflected at their historical amounts in the Group’s consolidated financial statements as if the reorganization had always been in place. As such, the Group’s consolidated financial statements were prepared as if TDCX has control over TDCX KY, TDCXH and TDCX SG for all periods presented.

The unaudited condensed interim consolidated financial statements of the Group for the six months period ended June 30, 2021 were authorized for issue by the Board of Directors of TDCX on September 7, 2021.

 

2

Basis of Preparation of the Financial Statements

The unaudited condensed interim consolidated financial statements for the 6 months ended June 30, 2021 and 2020 have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”). The unaudited condensed interim consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The unaudited condensed interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group’s annual consolidated financial statements as of December 31, 2020.

The accounting policies adopted are consistent with those of the previous financial year which were prepared in accordance with IFRS.

 

F-60


Table of Contents

TDCX Inc. and its Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

 

Convenience translation

The translations of Singapore Dollar amounts into United States Dollar (“USD”) for the unaudited condensed interim consolidated statement of financial position, unaudited condensed interim consolidated statement of profit or loss and other comprehensive income, unaudited condensed interim consolidated statement of cash flow, and segmental reporting as disclosed in Note 15 for the 6 months ended June 30, 2021 are included solely for the convenience of readers outside of Singapore and have been made at the rate of S$1.344 to US$1, the approximate rate of exchange at June 30, 2021. Such translations should not be construed as representations that the Singapore Dollar amounts could be converted into USD at that or any other rate.

New and amended standards adopted by the Group

A number of amendments to Standards have become applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting those standards.

New and revised IFRS Standards in issue but not yet effective

At the date of authorization of these financial statements, the Group has not applied the following new and revised International Financial Reporting Standards (“IFRS”) that have been issued but are not yet effective:

 

Amendments to IFRS 16

   Covid-19-Related Rent Concessions beyond June 30, 2021

Amendments to IAS 1

   Classification of Liabilities as Current or Non-current

Amendments to IFRS 3

   Reference to the Conceptual Framework

Amendments to IAS 16

   Property, Plant and Equipment—Proceeds before Intended Use

Annual improvements to IFRS Standards 2018 – 2020 Cycle

   Amendments to IFRS 1-First-time Adoption of International Standards, IFRS 9 Financial instruments, IFRS 16 Leases and IAS 41 Agriculture.

The management does not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods.

Use of judgments and estimates

In preparing the unaudited condensed interim financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended December 31, 2020.

 

3

Trade Receivables

 

     June 30,
2021
     December 31,
2020
 
     S$’000      S$’000  

Outside parties

     46,806        36,919  
  

 

 

    

 

 

 

 

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Table of Contents

TDCX Inc. and its Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

 

The credit period on rendering of service to outside parties is 30 to 90 days (December 31, 2020: 30 to 90 days). No interest is charged on the trade receivables during the credit period of the invoices. Thereafter, interest may be charged ranging from 12% to 15% per annum (December 31, 2020: 12% to 15% per annum) on the outstanding balance.

Loss allowance for trade receivables has been measured at an amount equal to the lifetime ECL. The ECL on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtors, and where relevant general economic conditions of the industry in which the debtors operate.

 

4

Plant and Equipment

During the 6 months ended June 30, 2021, the Group acquired assets amounting to S$18.3 million (June 30, 2020: S$7.2 million) and disposed of assets with net book value amounting to S$60,000 (June 30, 2020:S$ NIL).

At June 30, 2021, the Group had entered into contractual commitments for the acquisition of plant and equipment amounting to S$3 million (June 30, 2020: S$0.7 million).

 

5

Other Payables

 

     June 30,
2021
     December 31,
2020
 
     S$’000      S$’000  

Outside parties

     37,600        35,875  

Deferred grant income

     —          1,161  

Others

     194        164  
  

 

 

    

 

 

 
     37,794        37,200  
  

 

 

    

 

 

 

 

6

Bank Loans

 

     June 30,
2021
     December 31,
2020
 
     S$’000      S$’000  

Secured—at amortized cost:

     

Bank loans

     289,054        40,306  
  

 

 

    

 

 

 

Analyzed between:

     

Current portion

     

Within 1 year

     25,144        24,170  

Non-current portion

     

Within 2 to 5 years

     263,910        16,136  
  

 

 

    

 

 

 
     289,054        40,306  
  

 

 

    

 

 

 

Interest payable (included in bank loans)

     439        308  
  

 

 

    

 

 

 

On May 17, 2021, TDCX SG revised its credit facility terms previously entered with a third-party financial institution (“Financial Institution A”) on October 16, 2019. As a result of the revision, the revised credit facility arrangement reduced the borrowings to an aggregate amount of S$45.2 million

 

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TDCX Inc. and its Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

 

from S$57.4 million, replacing the previously S$27.4 million refinancing facility with a S$15.2 million multi-currency specific advance facility. The revision had no impact on the S$20 million advance facility, S$5.0 million foreign exchange facility, S$3.5 million interest rate derivatives facility and S$1.5 million banker’s guarantee. As at June 30, 2021, the outstanding balance drawn down from the above revised facility due to the Financial Institution A amounted to S$37.5 million.

The revised credit facilities letter agreement contains financial covenants including: (a) tangible net worth of TDCX SG not less than S$25.0 million; (b) for TDCX SG, a maximum ratio of total indebtedness to tangible net worth not exceeding 2.0 times; (c) TDCX maintains a consolidated debt service coverage ratio not less than 2.0 times; and (d) TDCX maintains a ratio of total net debt divided by EBITDA of not more than 2.0 times.

On March 16, 2021, TDCX entered into a term loan credit facility agreement with another third-party financial institution, (“Financial Institution B”), to provide for borrowings in an aggregate amount of S$252 million (US$188 million). On March 23, 2021, TDCX drew down on the loan in an amount of S$252 million. The loan carries interest rate of 3.15% above 3-month London interbank offered rate (“LIBOR”) for the first 18 months and 3.45% above 3-month LIBOR subsequently. The loan is denominated in USD and scheduled to be repaid on March 23, 2023, with an option to extend for 12 months. If the repayment term is extended for an additional 12 months, the loan shall be repaid in three instalments with the first instalment (being 25% of the outstanding principal) due 24 months after the drawdown of the loan, the second instalment (being a further 25% of the outstanding principal) due 30 months after the drawdown of the loan and the final instalment (the remaining outstanding balance) due 36 months after the drawdown of the loan. The loan shall become due and payable on the tenth business day after an initial public offering.

The loan is guaranteed by TDCXH and TDCX KY and secured by a mortgage of the Founder’s shares in TDCX. Additionally, the Founder is required to maintain an amount equal to 80% of the amount outstanding under the loan deposited in a collateralized bank account with the Financial Institution B.

Among others, the loan contains covenants for TDCX include: (a) maintaining a ratio of earnings before interest, taxes, depreciation, and amortization (“EBITDA”) to finance charges of not less than 6:1 for a trailing 12 months period at the end of each financial year and financial quarter; and (b) maintaining a ratio of total net debt to EBITDA of not more than 2:1 for a trailing 12-month period at the end of each financial year and quarter.

The Group was in compliance with its financial covenants for the 6 months ended June 30, 2021.

 

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TDCX Inc. and its Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

 

7

Lease Liabilities

 

     June 30,
2021
     December 31,
2020
 
     S$’000      S$’000  

Minimum lease payments

     

Amounts due for settlement within 12 months (shown under current liabilities)

     14,132        14,664  

Amounts due for settlement after 12 months and not later than 5 years

     17,238        17,823  
  

 

 

    

 

 

 
     31,370        32,487  
  

 

 

    

 

 

 

The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the Group’s treasury function. Lease liabilities approximate fair value as at end of reporting period.

During the 6 months ended June 30, 2021, the Group entered into new leases and renewed certain office space with lease term ranging from 1 to 5 years amounting to S$6.7 million (June 30, 2020: S$5.9 million). For the period ended June 30, 2021, the total cash outflow for leases amounted to S$9.9 million (June 30, 2020: S$6.9 million).

 

8

Share Capital

On May 21, 2021, TDCX completed the following transactions which resulted in the increase in number of issued ordinary shares from one ordinary share to 123,500,000 ordinary shares:

 

  (i)

A share split pursuant to which one ordinary share was sub-divided into 10,000 ordinary shares; and

 

  (ii)

An issuance of additional 123,490,000 ordinary shares for a nominal consideration of S$16,433 (US$12,349). Such issuance was accounted for as a share split.

All references in the accompanying financial statements and related notes to the number of ordinary shares and per share data have been revised on a retroactive basis for all periods presented to reflect the effect of the above transactions.

 

9

Revenue

 

     June 30,
2021
     June 30,
2020
 
     S$’000      S$’000  

Over time

     

Omnichannel CX solutions

     157,688        138,396  

Sales and digital marketing

     47,715        29,335  

Content monitoring and moderation

     43,046        39,441  

Workspace and payroll services

     2,924        1,908  
  

 

 

    

 

 

 
     251,373        209,080  
  

 

 

    

 

 

 

At a point in time

     

Other services

     264        200  
  

 

 

    

 

 

 
     251,637        209,280  
  

 

 

    

 

 

 

 

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TDCX Inc. and its Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

 

10

Profit for the Period

Significant items:

 

     June 30,
2021
     June 30,
2020
 
     S$’000      S$’000  

Defined contribution plan

     5,259        4,121  

Wages, salaries, bonus and other benefits

     150,167        122,046  

Finance costs:

     

Interest on bank loans

     2,835        659  

Interest expense on lease liabilities

     804        740  

Accretion on provision for reinstatement cost

     69        61  

Others

     39        36  

Foreign exchange gain—net (included in other operating expenses)

     (326      (125
  

 

 

    

 

 

 

 

11

Other Operating Income

 

     June 30,
2021
     June 30,
2020
 
     S$’000      S$’000  

Government grant and credit scheme subsidies

     2,565        3,336  

Others

     179        529  
  

 

 

    

 

 

 
     2,744        3,865  
  

 

 

    

 

 

 

The Group received wage support for local employees under the Jobs Support Scheme (“JSS”) from the Singapore Government as part of the Government’s measures to support businesses during the period of economic uncertainty impacted by COVID-19. Such grant income is recognized in profit or loss on a systematic basis over the period of uncertainty in which the related salary costs for which the grant is intended to compensate is recognized as expenses.

 

12

Income Tax Expenses

 

     June 30,
2021
     June 30,
2020
 
     S$’000      S$’000  

Income tax:

     

Current period

     10,918        9,841  

Over provision of prior periods

     (32      —    
  

 

 

    

 

 

 
     10,886        9,841  

Deferred tax:

     

Current period

     (427      (99

Over provision of prior periods

     (477      —    
  

 

 

    

 

 

 
     (904      (99

Foreign withholding tax

     52        27  
  

 

 

    

 

 

 
     10,034        9,769  
  

 

 

    

 

 

 

 

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TDCX Inc. and its Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

 

Income tax expense is recognized based on management’s estimate of the weighted average effective annual income tax rate expected for the full financial year. The estimated average annual effective income tax rate used for the year to December 31, 2020 is 20%, compared to 17.7% for the 6 months ended June 30, 2021 (June 30, 2020: 20%).

 

13

Basic and Diluted Earnings Per Share

The calculation of the basic and diluted earnings per share attributable to the shareholders of the Group is based on the following data:

 

     June 30,
2021
     June 30,
2020
 
     S$’000      S$’000  

Earnings

     

Earnings for the purposes of basic and diluted earnings per share (profit for the period attributable to owners of the Group)

     44,763        38,524  

Number of shares

     

Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share

     123,500,000        123,500,000  
  

 

 

    

 

 

 

 

     June 30,
2021
     June 30,
2020
 
     S$      S$  

Basic and diluted earnings per share

     0.36        0.31  
  

 

 

    

 

 

 

 

14

Reserves

On March 23, 2021, the Founder transferred his 100% equity interest in TDCX KY to TDCX. As part of this transaction, TDCX drew upon its loan facility agreement in an aggregate amount of S$252 million (US$188 million) and subsequently distributed all the proceeds to the Founder. The transaction has been treated as common control transaction and was accounted for in a manner similar to a pooling of interest with assets and liabilities reflected at their historical amounts in the Group’s consolidated financial statements.

The proceeds distributed to the Founder were accounted for as a distribution in the Company’s consolidated statement of changes in equity.

 

15

Segmental Reporting

Based on an overall evaluation of all facts and circumstances, and after combining operating segments with similar economic characteristics that comply with the aggregation criteria specified in IFRS 8

 

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TDCX Inc. and its Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

 

Operating segments, the Group has determined that it operates as a single reportable segment. The information below includes information about the Group’s products and services, geographical areas, and major customers.

 

     June 30,
2021
     June 30,
2021
     June 30,
2020
 
     US$’000      S$’000      S$’000  

Revenue

        

Omnichannel CX solutions

     117,292        157,688        138,396  

Sales and digital marketing

     35,492        47,715        29,335  

Content monitoring and moderation

     32,019        43,046        39,441  

Workspace, payroll and other services

     2,371        3,188        2,108  
  

 

 

    

 

 

    

 

 

 
     187,174        251,637        209,280  
  

 

 

    

 

 

    

 

 

 

Analysis of revenue and carrying amount of non-current asset by geography

The Group presents revenue by geographical location based on which office delivers the service, irrespective of the location of the customer engaging the Group’s services or location of the customer that the Group is interacting with.

 

     Revenue      Non-current assets  
     June 30,
2021
     June 30,
2021
     June 30,
2020
     June 30,
2021
     December 31,
2020
 
     US$’000      S$’000      S$’000      S$’000      S$’000  

Singapore

     50,488        67,876        56,713        4,516        5,427  

Philippines

     47,692        64,117        49,983        31,130        29,621  

Malaysia

     48,118        64,690        56,773        10,124        11,246  

Thailand

     24,006        32,274        26,114        11,142        11,317  

Japan

     11,077        14,892        11,712        6,311        836  

China

     3,649        4,906        6,801        1,221        2,606  

Spain

     2,144        2,882        1,184        2,976        2,449  

India

     —          —          —          4,007        3,745  

Colombia

     —          —          —          4,777        3,224  

Romania

     —          —          —          4        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     187,174        251,637        209,280        76,208        70,471  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Information about major customers

During the period, the Group had revenue transactions with major customers that amounted to more than 10% of the Group’s revenue as follows:

 

     June 30,
2021
     June 30,
2020
 
     S$’000      S$’000  

Customer

     

A

     109,565        71,054  

B

     47,174        59,244  

C

     29,126        27,156  
  

 

 

    

 

 

 
     185,865        157,454  
  

 

 

    

 

 

 

 

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TDCX Inc. and its Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

 

16

Events after the Reporting Period

The Group has evaluated events subsequent to the balance sheet date of June 30, 2021 through September 7, 2021, the date on which the financial statements are available to be issued.

Subsequent to the period end,

 

  (1)

On August 6, 2021, TDCX SG drew S$13.7 million from the multi-currency specific advance facility from Financial Institution A to repay the outstanding refinancing facility with Financial Institution A. The multi-currency specific advance facility bears an interest of 1.25% per annum over the prevailing cost of funds for the financial institution (as determined by the financial institution) for interest periods of up to three months. The loan is denominated in Singapore dollar and is repayable on demand. The limit of the borrowings under the multi-currency specific advance facility is subject to 9 equal quarterly reductions of S$1.52 million commencing on October 19, 2021 until the facility is fully repaid. On September 3, 2021, TDCX SG further amended the revised credit facility as to decrease the facility to an aggregate amount of S$43.7 million from S$45.2 million through a S$1.5 million reduction on its multi-currency specific advance facility.

 

  (2)

On August 26, 2021, the TDCX’s board of directors approved and adopted the TDCX Performance Share Plan (the “PSP”) which allows TDCX to offer ordinary shares or American Depositary Shares (“ADSs”) to eligible employees, officers, consultants and directors who fulfil certain performance criteria as prescribed pursuant to the PSP. Under the PSP, the number of ordinary shares or ADSs awarded shall not exceed 5.0% of the total number of issued and outstanding shares of TDCX. As of September 7, 2021, no awards under the PSP have been granted.

 

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Table of Contents

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Cayman Islands’ laws do not prohibit or restrict a company from indemnifying its directors and officers against personal liability for any loss they may incur arising out of the Company’s business, except to the extent such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. The indemnity extends only to liability for their own negligence and breach of duty other than breaches of fiduciary duty and not where there is evidence of dishonesty, willful default or fraud.

Our post-offering memorandum and articles of association, which will become effective immediately prior to the completion of this offering, will permit, to the fullest extent permissible under Cayman Islands law, indemnification of our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by them, other than by reason of their own dishonesty, willful default or fraud, in connection with the execution or discharge of their duties, powers, authorities or discretion as directors or officers of our Company, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by them in defending (whether successfully or otherwise) any civil proceedings concerning our Company or its affairs in any court whether in the Cayman Islands or elsewhere.

We intend to enter into indemnification agreements with each of our directors and officers. These agreements will require us to indemnify these individuals to the fullest extent permitted under Cayman Islands law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified, subject to our Company reserving its rights to recover the full amount of such advances in the event that he or she is subsequently found to have been negligent or otherwise have breached his or her trust or fiduciary duties to our Company or to be in default thereof, or where the Cayman Islands courts have declined to grant relief.

The form of underwriting agreement to be filed as Exhibit 1.1 to this registration statement will also provide for indemnification of us and our officers and directors.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

ITEM 7. RECENT SALES OF UNREGISTERED SECURITIES

During the past three years, we have issued and sold the following securities without registering such securities under the Securities Act. We believe that each of the following issuances was exempt from registration under the Securities Act pursuant to Section 4(a)(2) of the Securities Act regarding transactions not involving a public offering or in reliance on Regulation S under the Securities Act regarding sales by an issuer in offshore transactions. No underwriters were involved in these issuances of securities.

Ordinary Shares

 

Securities/Purchaser

  

Date of Sale or
Issuance

  

Number of
Securities

  

Consideration

Ordinary shares         
Mapcal Limited   

April 16, 2020

  

1

  

Past and future services provided to us

Transformative Investments Pte Ltd.    May 21, 2021    123,490,000    US$12,349

 

II-1


Table of Contents

ITEM 8. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 

(a)

Exhibits

See “Exhibit Index” beginning on page II-3 of this registration statement.

 

(b)

Financial Statement Schedules

All supplement schedules are omitted because of the absence of conditions under which they are required or because the data is shown in the financial statements or notes thereto.

ITEM 9. UNDERTAKINGS

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

 

1)

For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

 

2)

For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

II-2


Table of Contents

TDCX Inc.

EXHIBIT INDEX

 

  No.  

  

Description

  1.1    Form of Underwriting Agreement
  3.1†    Amended and Restated Memorandum and Articles of Association of TDCX Inc., as currently in effect
  3.2    Second Amended and Restated Memorandum and Articles of Association of TDCX Inc., to become effective immediately prior to the completion of this offering
  4.1    Form of American Depositary Receipt evidencing American Depositary Shares (included in Exhibit 4.3)
  4.2†    Specimen certificate for Class A ordinary shares
  4.3    Form of Deposit Agreement among TDCX Inc., the depositary and all holders of the American Depositary Receipts issued thereunder
  5.1†    Form of opinion of Maples and Calder (Hong Kong) LLP as to the validity of Class  A ordinary shares being registered and certain Cayman Islands tax matters
  8.1†    Form of opinion of Maples and Calder (Hong Kong) LLP regarding certain Cayman tax matters (included in Exhibit 5.1)
10.1†    Facility Agreement, dated March 16, 2021, by and among TDCX Inc. and Credit Suisse AG, Singapore Branch
10.2†    Amendment Agreement, dated May 21, 2021, by and among TDCX Inc. and Credit Suisse AG, Singapore Branch
10.3†    Facility Agreement, dated September 3, 2021, by and between TDCX (SG) Pte. Ltd. and Oversea-Chinese Banking Corporation Limited
10.4†   

Shareholders’ Loan Agreement, dated December 20, 2019, by and among Teledirect Hong Kong Limited, TDCX Holdings Pte. Ltd., Michael Thomas Cowell and Milton Kung

10.5†    Form of director and executive officer indemnification agreement
10.6†    TDCX Performance Share Plan
10.7†#    Call Center Services Agreement among Facebook Ireland Limited and TDCX (SG) Pte. Ltd. (formerly known as Teledirect Pte Ltd) dated November 18, 2015
10.8†#    Master Services Agreement for Contact Center Services among Airbnb Ireland Unlimited Company and TDCX Holdings Pte. Ltd. dated August  1, 2021
10.9†    Form of Registration Rights Agreement among the Registrant and the Principal Shareholder
21.1†    List of subsidiaries of TDCX Inc.
23.1†    Consent of Maples and Calder (Hong Kong) LLP (included in Exhibit 5.1)
23.2    Consent of Deloitte & Touche LLP, registered public accounting firm
23.3†    Consent of Thanathip & Partners Legal Counsellors Limited (included in Exhibit 99.1)
24.1†    Power of Attorney (included on signature page)
99.1†    Opinion of Thanathip & Partners Legal Counsellors Limited regarding certain Thai legal matters
99.2†    Consent of Frost & Sullivan Limited

 

II-3


Table of Contents

  No.  

  

Description

99.3†    Consent of Chia Ling Koh
99.4†    Consent of Yee Peng Tan

 

#

Confidential portions of the exhibit have been omitted.

Previously filed

 

II-4


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Singapore, on September 27, 2021.

 

TDCX Inc.
By:  

/s/ Laurent Junique

 

Name: Laurent Junique

 

Title: Executive Chairman and CEO

We, the undersigned directors of TDCX Inc. and executive officers of TDCX Inc. and its subsidiaries hereby severally constitute and appoint Laurent Junique, singly (with full power to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in him for him and in his name, place and stead, and in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement (or any other Registration Statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and him, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ Laurent Junique

Laurent Junique

   Executive Chairman and Chief Executive Officer (Principal Executive Officer)   September 27, 2021

/s/ Edward Goh

Edward Goh

  

EVP Corporate Development and Director

  September 27, 2021

/s/ Tze Neng Chin

Tze Neng Chin

   Chief Financial Officer and Director (Principal Financial and Accounting Officer)   September 27, 2021

 

II-5


Table of Contents

SIGNATURE OF AUTHORIZED REPRESENTATIVE OF THE REGISTRANT

Pursuant to the Securities Act, the undersigned, the duly authorized representative in the United States of TDCX Inc., has signed this registration statement or amendment thereto in New York, New York, United States of America on September 27, 2021.

 

AUTHORIZED U.S. REPRESENTATIVE
Cogency Global Inc.
By:  

/s/ Colleen A. De Vries

  Name: Colleen A. De Vries
  Title: Senior Vice President on behalf of Cogency Global Inc.

 

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EX-1.1

Exhibit 1.1

TDCX Inc.

American Depositary Shares

Representing

Class A Ordinary Shares

(par value US$                per share)

UNDERWRITING AGREEMENT

, 2021

GOLDMAN SACHS & CO. LLC

CREDIT SUISSE SECURITIES (USA) LLC

As Representatives of the Several Underwriters

c/o Goldman Sachs & Co. LLC

200 West Street

New York, N.Y. 10282-2198

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, N.Y. 10010-3629

Dear Sirs:

 

  1.

Introductory. TDCX Inc., an exempted company incorporated in the Cayman Islands (the “Company”) agrees with the several Underwriters named in Schedule 1 hereto (“Underwriters”) to issue and sell to the several Underwriters                 American Depositary Shares (“ADSs”) representing                 Class A ordinary shares, par value US$                 per share (“Shares”) of the Company (“Securities”). The aggregate                 Securities to be sold by the Company are herein called the “Firm Securities”. The Company also agrees to sell to the Underwriters, at the option of the Underwriters, an aggregate of not more than                 additional Securities (the “Optional Securities”), as set forth below. The Firm Securities and the Optional Securities are herein collectively called the “Offered Securities”.

The ADSs are to be issued pursuant to a deposit agreement dated as of                 , 2021 (the “Deposit Agreement”) among the Company, JPMorgan Chase Bank, N.A., as Depositary (the “Depositary”), and the holders and beneficial owners of ADSs evidenced by American Depositary Receipts (“ADRs”) issued under the Deposit Agreement. Each ADS will initially represent the right to receive                 Shares deposited pursuant to the Deposit Agreement.

 

  2.

Representations and Warranties of the Company.

(a) The Company represents and warrants to, and agrees with, the several Underwriters that:

(i) Filing and Effectiveness of Registration Statement; Certain Defined Terms. The Company has filed with the Commission a registration statement on Form F-1 (No. 333-259361) covering the registration of the Offered Securities under the Act, including a related preliminary prospectus or prospectuses. At any particular time, this initial registration statement, as amended until such time it becomes effective, in the form then on file with the Commission, including all information contained in the registration statement (if any) pursuant to Rule 462(b) and then deemed to be a part of the initial registration statement, and all 430A Information and 430C Information, that in any case has not then been superseded or modified, shall be referred to as the “Initial Registration Statement”. The Company may also have filed, or may file with the Commission, a Rule 462(b) registration statement covering the registration of the Offered Securities. At any particular time, this Rule 462(b) registration statement, in the form then on file with the Commission, including the contents of the Initial Registration Statement incorporated by reference therein and including all 430A Information and all 430C Information, that in any case has not then been superseded or modified, shall be referred to as the “Additional Registration Statement”. A registration statement on Form F-6 (File No. 333-                ) relating to the ADSs has been filed with the Commission and has become effective (such registration statement on Form F-6, including all exhibits thereto, as amended at the time such registration statement becomes effective, being herein called the “ADS Registration Statement”). The Company has also filed, in accordance with Section 12 of the Exchange Act (as defined below), a registration statement (the “Exchange Act Registration Statement”) on Form 8-A (File No. 333-                ) under the Exchange Act to register, under Section 12(b) of the Exchange Act, the Shares and the ADSs.


As of the time of execution and delivery of this Agreement, each of the Initial Registration Statement and the ADS Registration Statement has been declared effective under the Act and is not proposed to be amended. Any Additional Registration Statement has or will become effective upon filing with the Commission pursuant to Rule 462(b) and, as of the time of execution and delivery of this Agreement, is not proposed to be amended. No stop order suspending the effectiveness of the Initial Registration Statement (or any post-effective amendment thereto), the ADS Registration Statement or the Additional Registration Statement, if any, is in effect, and no proceedings for such purpose are pending or to the Company’s knowledge threatened by the Commission. The Offered Securities all have been or will be duly registered under the Act pursuant to the Initial Registration Statement and, if applicable, the Additional Registration Statement.

For purposes of this Agreement:

430A Information”, with respect to any registration statement, means information included in a prospectus and retroactively deemed to be a part of such registration statement pursuant to Rule 430A(b).

430C Information”, with respect to any registration statement, means information included in a prospectus then deemed to be a part of such registration statement pursuant to Rule 430C.

Act” means the United States Securities Act of 1933, as amended.

Applicable Time” means                 [a/p]m (New York City time) on the date of this Agreement.

Closing Date” has the meaning defined in Section 3 hereof.

Commission” means the United States Securities and Exchange Commission.

Effective Time” with respect to the Initial Registration Statement or, if filed prior to the execution and delivery of this Agreement, the Additional Registration Statement means the date and time as of which such Registration Statement was declared effective by the Commission or has become effective upon filing pursuant to Rule 462(c). If an Additional Registration Statement has not been filed prior to the execution and delivery of this Agreement but the Company has advised the Representatives that it proposes to file one, “Effective Time” with respect to such Additional Registration Statement means the date and time as of which such Additional Registration Statement is filed and becomes effective pursuant to Rule 462(b).

Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

Final Prospectus” means the Statutory Prospectus that discloses the public offering price, other 430A Information and other final terms of the Offered Securities and otherwise satisfies Section 10(a) of the Act.

FINRA” has the meaning defined in Section 2(a)(xiv) hereof.

General Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a Bona Fide Electronic Road Show (as defined below)), as evidenced by its being so specified in Schedule 2 to this Agreement.

 

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Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Offered Securities in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g). The Company has made available a “bona fide electronic road show,” as defined in Rule 433, in compliance with Rule 433(d)(8)(ii) (the “Bona Fide Electronic Road Show”) such that no filing of such “road show” (as defined in Rule 433(h)) is required in connection with the offering of the Offered Securities.

Limited Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not a General Use Issuer Free Writing Prospectus.

The Initial Registration Statement and any Additional Registration Statement, after the filing thereof, are referred to collectively as the “Registration Statements” and each is individually referred to as a “Registration Statement”. A “Registration Statement” with reference to a particular time means the Initial Registration Statement and any Additional Registration Statement as of such time. A “Registration Statement” without reference to a time means such Registration Statement as of its Effective Time. For purposes of the foregoing definitions, 430A Information with respect to a Registration Statement shall be considered to be included in such Registration Statement as of the time specified in Rule 430A.

Rules and Regulations” means the rules and regulations of the Commission.

Securities Laws” means, collectively, the Sarbanes-Oxley Act of 2002, as amended and all rules and regulations promulgated thereunder or implementing the provisions thereof (“Sarbanes-Oxley”), the Act, the Exchange Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of “issuers” (as defined in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board and the rules of The New York Stock Exchange (“Exchange Rules”).

Statutory Prospectus” with reference to a particular time means the prospectus included in a Registration Statement immediately prior to that time, including any 430A Information or 430C Information with respect to such Registration Statement. For purposes of the foregoing definition, 430A Information shall be considered to be included in the Statutory Prospectus as of the actual time that form of prospectus is filed with the Commission pursuant to Rule 424(b) or Rule 462(c) and not retroactively.

Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Act.

Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Act.

Unless otherwise specified, a reference to a “rule” is to the indicated rule under the Act.

(ii) Compliance with Securities Act Requirements. (i) (A) At their respective Effective Times, (B) on the date of this Agreement and (C) on each Closing Date, each of the Initial Registration Statement, the Additional Registration Statement (if any) and the ADS Registration Statement and any amendments and supplement thereto conformed and, as applicable, will conform in all material respects to the requirements of the Act and the Rules and Regulations, and did not and, as applicable, will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (ii) on its date, at the time of filing of the Final Prospectus pursuant to Rule 424(b) or (if no such filing is required) at the Effective Time of the Additional Registration Statement in which the Final Prospectus is included, and on each Closing Date, the Final Prospectus will conform in all material respects to the requirements of the Act and the Rules and Regulations and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The preceding sentence does not apply to statements in or omissions from any such document based upon written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 7(b) hereof.

 

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(iii) Ineligible Issuer Status. (i) At the time of the initial filing of the Initial Registration Statement; and (ii) at the date of this Agreement, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, including (x) the Company or any subsidiary of the Company in the preceding three years not having been convicted of a felony or misdemeanor or having been made the subject of a judicial or administrative decree or order as described in Rule 405 and (y) the Company in the preceding three years not having been the subject of a bankruptcy petition or insolvency or similar proceeding, not having had a registration statement be the subject of a proceeding under Section 8 of the Act and not being the subject of a proceeding under Section 8A of the Act in connection with the offering of the Offered Securities, all as described in Rule 405.

(iv) Foreign Private Issuer Status. The Company is a “foreign private issuer” within the meaning of Rule 405 under the Act.

(v) Emerging Growth Company Status. From the time of the initial confidential submission of the Initial Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged directly or through any person authorized to act on its behalf in any Testing-the-Waters Communication) through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Act (an “Emerging Growth Company”).

(vi) General Disclosure Package. As of the Applicable Time, none of (i) the General Use Issuer Free Writing Prospectus(es), if any, issued at or prior to the Applicable Time, the preliminary prospectus, dated                 , 2021 (which is the most recent Statutory Prospectus distributed to investors generally) and the other information, if any, stated in Schedule 2 to this Agreement to be included in the General Disclosure Package, all considered together (collectively, the “General Disclosure Package”), (ii) any individual Limited Use Issuer Free Writing Prospectus, when considered together with the General Disclosure Package, or (iii) any individual Written Testing-the-Waters Communication, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus, any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.

(vii) Issuer Free Writing Prospectuses. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Act has been, or will be, filed with the Commission in accordance with the requirements of the Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Act or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of the Act and the applicable rules and regulations of the Commission thereunder. Except for any General Use Issuer Free Writing Prospectus identified in Schedule 2 hereto and the Bona Fide Electronic Road Show furnished to the Representatives before first use, the Company has not prepared, used or referred to, and will not, without the prior consent of the Representatives, prepare, use or refer to, any free writing prospectus. Each Issuer Free Writing Prospectus and each Written Testing-the-Waters Communication, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Offered Securities or until any earlier date that the Company notified or notifies the Representatives as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement (other than in the case of an Issuer Free Writing Prospectus that eliminates or corrects a previously existing conflict, untrue statement or omission in the Registration Statement). If at any time following issuance of an Issuer Free Writing Prospectus or Written Testing-the-Waters Communication, as applicable, and prior to the later of (i) completion of the distribution of the Offered Securities within the meaning of the Act and (ii) the last Closing Date, there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus or Written Testing-the-Waters Communication, as applicable, conflicted or would conflict with the information then contained in the Registration Statement or as a result of which such Issuer Free Writing Prospectus, or Written Testing-the-Waters Communication, as applicable, if republished immediately following such event or development, would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (i) the Company has promptly notified or will promptly notify the Representatives and (ii) the Company has promptly amended or will promptly amend or supplement such Issuer Free Writing Prospectus or Written Testing-the-Waters Communication, as applicable, to eliminate or correct such conflict, untrue statement or omission. No stop order preventing or suspending the use of any Issuer Free Writing Prospectus is in effect.

 

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(viii) Testing-the-Waters Communication. The Company (a) has not alone engaged in any Testing-the-Waters Communication except for Testing-the-Waters Communications with the consent of the Representatives with qualified institutional buyers within the meaning of Rule 144A under the Act or institutions that are accredited investors within the meaning of Rule 501 under the Act and (b) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company reconfirms that the Representatives have been authorized to act on the Company’s behalf in undertaking Testing-the-Waters Communication. The Company has not presented to any potential investors or otherwise distributed, or authorized anyone other than the Representatives to present or distribute, any Written Testing-the-Waters Communication.

(ix) Good Standing of the Company. The Company has been duly incorporated and is validly existing as an exempted company with limited liability in good standing under the laws of the Cayman Islands, with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Final Prospectus and to enter into and perform its obligations under this Agreement; and the Company is duly qualified to do business as a foreign corporation in good standing (to the extent such concept exists in such jurisdiction) in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified or licensed or in good standing would not have a Material Adverse Effect. The currently effective memorandum and articles of association comply with the requirements of applicable Cayman Islands law and are in full force and effect. No change will be made to any such constitutive documents on or after the date of this Agreement through and including the Closing Date other than the second amended and restated memorandum and articles of association of the Company adopted on September 7, 2021 filed as Exhibit 3.2 to the Registration Statement, which comply with the requirements of applicable Cayman Islands laws and, immediately prior to the completion of the Offering on the Closing Date, will be in full force and effect.

(x) Subsidiaries. Each subsidiary of the Company has been listed in the Registration Statement, and has been duly incorporated and is validly existing and in good standing (to the extent such concept exists in the jurisdiction of the relevant subsidiary) under the laws of the jurisdiction of its incorporation or organization, with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Final Prospectus; and except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, each subsidiary of the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect; all of the issued and outstanding capital stock of each subsidiary of the Company has been duly authorized and, except as neither required by the laws and regulations in the subsidiary’s jurisdiction of incorporation nor pursuant to such subsidiary’s constitutional documents, validly issued and is fully paid and non-assessable; and the capital stock of each subsidiary owned, directly or indirectly, by the Company is owned free from liens, encumbrances, equities or claims and defects except for such liens, encumbrances, equities or claims which would not have a Material Adverse Effect or as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus. None of the outstanding share capital or equity interest in any subsidiary was issued in violation of preemptive or similar rights of any security holder of such subsidiary. All of the constitutive or organizational documents of each of the subsidiaries comply with the requirements of applicable laws of its jurisdiction of incorporation or organization and are in full force and effect.

 

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(xi) Corporate Structure. The structure of the Company’s ownership of each of its direct and indirect subsidiaries listed in the Registration Statement complies with all, and no such corporate ownership structure violates, breaches, contravenes or otherwise conflicts with any, applicable laws and regulations of the jurisdiction where each such subsidiary is incorporated or organized. There is no legal or governmental proceeding, inquiry or investigation pending or, to the best knowledge of the Company, threatened against the any subsidiary or any shareholder (including the Company) of such subsidiary challenging the validity of the corporate ownership structure of such subsidiary.

(xii) Offered Securities. The Offered Securities, the underlying Shares and all other issued and outstanding shares in the capital of the Company have been duly authorized; the authorized share capital of the Company is as set forth in the Registration Statement, the General Disclosure Package and the Final Prospectus; the Shares underlying the Offered Securities and all other issued and outstanding shares in the capital of the Company are validly issued, fully paid and non-assessable; the Offered Securities to be sold by the Company, when issued by the Depositary against the deposit of Shares in respect thereof in accordance with the provisions of the Deposit Agreement, will be validly issued, freely transferable by the Company to or for the account of the several Underwriters and the initial purchasers thereof; except as described in the Registration Statement, the General Disclosure Package and the Final Prospectus, there are no restrictions on subsequent transfers of the Offered Securities under the laws of the Cayman Islands or the United States; the persons in whose names such ADSs are registered will be entitled to the rights of registered holders of ADSs specified therein and in the Deposit Agreement; as of each Closing Date, the Offered Securities being delivered on such Closing Date shall have been delivered and paid for in accordance with this Agreement and the Deposit Agreement, as the case may be; the Offered Securities, the underlying Shares and all other outstanding shares of capital stock of the Company conform to the information in the General Disclosure Package and to the description of such securities contained in the Registration Statement, the General Disclosure Package and the Final Prospectus; and none of the issued and outstanding shares in the capital of the Company have been, and none of the Offered Securities when issued by the Depositary against the deposit of Shares in respect thereof in accordance with the provisions of the Deposit Agreement will have been, issued in violation of any preemptive or similar rights. Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, there are no outstanding (A) securities or obligations of the Company convertible into or exchangeable for any capital stock of the Company, (B) warrants, rights or options to subscribe for or purchase from the Company any such capital stock or any such convertible or exchangeable securities or obligations or (C) obligations of the Company to issue or sell any shares of capital stock, any such convertible or exchangeable securities or obligations or any such warrants, rights or options. The Company has not, directly or indirectly, offered or sold any of the Offered Securities by means of any “prospectus” (within the meaning of the Act and the Rules and Regulations) or used any “prospectus” or made any offer (within the meaning of the Act and the Rules and Regulations) in connection with the offer or sale of the Offered Securities, in each case other than the preliminary prospectus or free-writing prospectus referred to in Section 2(a)(vii) hereof, any Testing the Waters Communication referred to in Section 2(a)(viii) hereof, the General Disclosure Package and the Final Prospectus.

(xiii) Authorization of Agreements and Registration Statements. This Agreement has been duly authorized, executed and delivered by the Company. The Deposit Agreement has been duly authorized, executed and delivered by the Company and assuming due authorization, execution and delivery by the Depositary, constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles. The Registration Statement, the ADS Registration Statement, the General Disclosure Package, the Final Prospectus, any issuer free writing prospectus and the filing of the Registration Statement, the ADS Registration Statement, the Final Prospectus and any issuer free writing prospectus with the Commission have been duly authorized by and on behalf of the Company, and the Registration Statement and ADS Registration Statement have been duly executed pursuant to such authorization by and on behalf of the Company.

 

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(xiv) No Finders Fee. Except as disclosed in the Registration Statement, the General Disclosure Package, the Final Prospectus and as contemplated by this Agreement, there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder’s fee or other like payment in connection with this offering, and there are no other arrangements, agreements, understandings, payments or issuance with respect to the Company and its subsidiaries or any of their respective officers or directors, or to the knowledge of the Company, any of its shareholders, partners, affiliates or employees that may affect the Underwriters’ compensation as determined by the Financial Industry Regulatory Authority (“FINRA”).

(xv) Registration Rights. Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, there are no contracts or agreements between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to a Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Act. (collectively, “registration rights”), and any person to whom the Company has granted registration rights has agreed not to exercise such rights until after the expiration of the Lock-Up Period referred to in Section 5(a)(xv) hereof.

(xvi) Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Act and Section 21E of the Exchange Act) contained in the Registration Statement, the General Disclosure Package and the Final Prospectus (including all amendments and supplements thereto) has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

(xvii) Absence of Further Requirements. No consent, approval, authorization, or order of, or filing or registration with, or qualification of or with, any person (including any governmental agency or body or any court) is required to be obtained or made by the Company for the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated by this Agreement in connection with the offering, issuance and sale of the Offered Securities issued and sold by the Company, except such as have been obtained, or made and such as may be required under state securities laws or by FINRA.

(xviii) Title to Property. Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, the Company and its subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them that are material to the business of the Company and the subsidiaries taken as a whole, in each case free from all liens, charges, mortgages, pledges, security interests, claims, restrictions or encumbrances of any kind and defects that would materially affect the value thereof or materially interfere with the use made or to be made thereof by them and, except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, the Company and its subsidiaries hold any leased or tenanted real or personal property that are material to the business of the Company and the subsidiaries taken as a whole under valid and enforceable leases or tenancies (subject, as to enforceability, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles) with no terms or provisions that would materially interfere with the use made or to be made thereof by them.

 

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(xix) Absence of Defaults and Conflicts Resulting from Transaction. The execution, delivery and performance of this Agreement and the Deposit Agreement and the issuance and sale of the Offered Securities will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default or, except in the case of the Credit Suisse Facility (as defined in the Registration Statement, the General Disclosure Package and the Final Prospectus), a Debt Repayment Triggering Event (as defined below) under, or result in the imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, (a) the charter, memorandum and articles of association, constitution, by-laws or similar organizational documents of the Company or any of its subsidiaries, (b) any statute, rule, regulation, judgment or order of any governmental agency or body or any court, domestic or foreign or any arbiter, having jurisdiction over the Company or any of its subsidiaries or any of their properties, or (c) any mortgage, deed of trust, loan, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the properties of the Company or any of its subsidiaries is subject, except in the ease of (b) and (c) as would not individually or in the aggregate, result in a Material Adverse Effect; a “Debt Repayment Triggering Event” means any event or condition that gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture, or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.

(xx) Absence of Existing Defaults and Conflicts. Neither the Company nor any of its subsidiaries is (i) in violation of its respective charter, memorandum and articles of association, by-laws or similar organizational documents; (ii) in violation of or default (or with the giving of notice or lapse of time would be in default) under any existing obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease, deed of trust or other agreement or instrument to which any of them is a party or by which any of them is bound or to which any of the properties or assets of any of them is subject; or (iii) in breach or violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except in the case of clauses (ii) and (iii) above, for any such defaults or violation that would not, individually or in the aggregate, result in a material adverse effect on the condition (financial or otherwise), results of operations, business, properties, management, general affairs or prospects of the Company and its subsidiaries taken as a whole, or the ability of the Company to perform its obligations under this Agreement or the Deposit Agreement, including the issuance and sale of the Offered Securities, or to consummate the transactions contemplated in the Registration Statement, the General Disclosure Package and the Final Prospectus. (“Material Adverse Effect”).

(xxi) No Immunity. None of the Company or any of its subsidiaries has any right of immunity under the laws of any jurisdiction from any legal action, suit or proceeding, the giving of any relief in any legal action, suit or proceeding, set-off, counterclaim, service of process, attachment upon or prior to judgment, or attachment in aid of execution of judgment, or execution of a judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of a judgment, in any such court, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Agreement or the Deposit Agreement.

(xxii) Possession of Licenses and Permits. The Company and its subsidiaries possess, and are in compliance with the terms of, all adequate certificates, authorizations, franchises, licenses and permits issued by appropriate federal, state, local or foreign regulatory bodies (collectively, “Licenses”) necessary or material to the conduct of the business now conducted or proposed to be conducted by them except where the failure to be in compliance with such Licenses would not, individually or in the aggregate, have a Material Adverse Effect. All such Licenses that the Company and its subsidiaries possess are in full force and effect except where the failure to be in full force and effect would not, individually or in the aggregate, have a Material Adverse Effect. The Company and each of its subsidiaries are in compliance with the terms and conditions of all Licenses that they possess and have not received any notice of proceedings relating to the revocation or modification of any such Licenses that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.

 

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(xxiii) Labor Laws and Regulations. The Company and its subsidiaries are and have been at all times been in compliance with all applicable labor laws and regulations, except where such non-compliance that would not, individually or in the aggregate, result in a Material Adverse Effect.

(xxiv) Absence of Labor Dispute. Except as would not result in a Material Adverse Effect, (a) no labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company or any of its subsidiaries, is imminent; and (b) the Company and its subsidiaries are not aware of any existing or imminent labor disturbance by the employees of any of its or any subsidiary’s principal suppliers, manufacturers, customers or contractors.

(xxv) Merger or Consolidation. Neither the Company nor any of its subsidiaries is a party to any memorandum of understanding, letter of intent, definitive agreement or similar agreement with respect to a merger or consolidation or an acquisition or disposition of assets, technologies, business units or businesses.

(xxvi) Termination of Contracts. Neither the Company nor any of its subsidiaries has sent or received any communication regarding termination of, or intent not to renew, any of the contracts or agreements referred to or described in the Registration Statement, the General Disclosure Package and the Final Prospectus or filed as an exhibit to the Registration Statement (including contracts or agreements with customers or suppliers referred to or described in the Registration Statement, the General Disclosure Package and the Final Prospectus), and no such termination or non-renewal has been threatened by any party to any such contract or agreement, except in each case as would not have a Material Adverse Effect.

(xxvii) Possession of Intellectual Property. The Company and its subsidiaries own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, technology, know-how, confidential information and other intellectual property, including registrations and applications for registration thereof (collectively, “intellectual property rights”) necessary to conduct the business now operated by them, or presently employed by them (except for where the lack of the foregoing would not have a Material Adverse Effect), and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.

(xxviii) Environmental Laws. (a) Neither the Company nor any of its subsidiaries (i) is or has been in violation of any foreign, federal, state or local statute, law, rule, regulation, judgment, order, decree, decision, ordinance, code or other legally binding requirement (including common law) relating to the pollution, protection or restoration of the environment, wildlife or natural resources; human health or safety; or the generation, use, handling, transportation, treatment, storage, discharge, disposal or release of, or exposure to, any Hazardous Substance (as defined below) (collectively, “Environmental Laws”), (ii) is conducting or funding, in whole or in part, any investigation, remediation, monitoring or other corrective action pursuant to any Environmental Law, including to address any actual or suspected Hazardous Substance, (iii) has received notice of, or, to the Company’s knowledge is subject to any action, suit, claim or proceeding alleging, any actual or potential liability under, or violation of, any Environmental Law, including with respect to any Hazardous Substance, (iv) is party to any order, decree or agreement that imposes any obligation or liability under any Environmental Law, or (v) is or has been in violation of, or has failed to obtain and maintain, any permit, license, authorization, identification number or other approval required under applicable Environmental Laws; (b) to the knowledge of the Company and its subsidiaries, there are no facts or circumstances that would reasonably be expected to result in any violation of or liability under any Environmental Law, including with respect to any Hazardous Substance, except in the case of clause (a) and (b) above, for such matters as would not individually or in the aggregate have a Material Adverse Effect; and (c) neither the Company nor any of its subsidiaries (i) is subject to any pending or, to the knowledge of the Company, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations or proceedings relating to any Environmental Law against the Company or any of its subsidiaries which would have a Material Adverse Effect, nor does the Company or any of its subsidiaries know any such proceeding is contemplated, (ii) is aware of any material effect on the capital expenditures, earnings or competitive position of the Company and its subsidiaries resulting from compliance with Environmental Laws, or (iii) anticipates any material capital expenditures relating to any Environmental Laws. For purposes of this subsection, “Hazardous Substance” means (A) any pollutant, contaminant, petroleum and petroleum products, by-products or breakdown products, radioactive materials, asbestos, asbestos-containing materials, polychlorinated biphenyls or toxic mold, and (B) any other toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous chemical, material, waste or substance.

 

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(xxix) Accurate Disclosure. The statements in the Registration Statement, the General Disclosure Package and the Final Prospectus under the headings “Risk Factors”, “History and Corporate Structure”, “Business—Contracts and Pricing Model”, “Business—Intellectual Property”, “Business—Insurance”, “Business—Litigation and Other Legal Proceedings”, “Management—Compensation of Directors and Executive Officers”, “Management—Performance Share Plan”, “Related Party Transactions”, “Description of Certain Indebtedness”, “Description of Share Capital”, “Certain Cayman Islands Company Considerations” and “Description of American Depositary Shares”, insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, or insofar as they purport to constitute a summary of the terms of the Offered Securities, the Shares and all other outstanding shares of capital stock of the Company are accurate, and fair summaries in all material respects of such legal matters, agreements, documents or proceedings.

(xxx) Absence of Manipulation. None of the Company, its subsidiaries or to the knowledge of the Company, its affiliates has taken, nor will the Company or its subsidiaries take, and the Company will use commercially reasonable efforts to procure that its affiliates do not take, directly or indirectly, any action that is designed, or would be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities or to result in a violation of Regulation M under the Exchange Act.

(xxxi) Statistical and Market-Related Data. Any third-party statistical, industry-related and market-related data included in a Registration Statement, a Statutory Prospectus, the General Disclosure Package, the Final Prospectus or any Written Testing-the-Waters Communication is based on or derived from sources that the Company believes to be reliable and accurate, and the Company has obtained the written consent for the use of such data or reasonably believes that the industry consultant Frost & Sullivan has obtained consent from such sources, in any such case to the extent required.

(xxxii) Internal Controls. Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, the Company maintains a system of internal controls, including, but not limited to, disclosure controls and procedures, internal controls over accounting matters and financial reporting, an internal audit function and legal and regulatory compliance controls (collectively, “Internal Controls”) that comply with applicable Securities Laws and are sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Internal Controls are, or upon consummation of the offering of the Offered Securities will be, overseen by the Audit Committee (the “Audit Committee”) of the Company’s Board of Directors (the “Board”) in accordance with Exchange Rules. Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, the Company has not publicly disclosed or reported to the Board, and within the next 135 days the Company does not reasonably expect to publicly disclose or report to the Audit Committee or the Board, a “significant deficiency” or “material weakness” (each, as defined in Rule 12b-2 of the Exchange Act), an adverse change in Internal Controls or fraud involving management or other employees who have a significant role in Internal Controls (each, an “Internal Control Event”), any violation of, or failure to comply with, the U.S. federal securities laws and the Exchange Rules, or any matter which, if determined adversely, would have a Material Adverse Effect. Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, the Company is not aware of any material weakness or significant deficiency in its Internal Controls.

 

10


(xxxiii) Disclosure Controls. The Company’s system of disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Exchange Act) was designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities. Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, such disclosure controls and procedures are effective to perform the functions for which they were established.

(xxxiv) Independent Accountants. Deloitte & Touche LLP, whose reports on the consolidated financial statements of the Company are included in the Registration Statement, the General Disclosure Package and the Final Prospectus, who have certified certain financial statements of the Company and its subsidiaries, are independent registered public accountants with respect to the Company as required by the Act and by the rules of the Public Company Accounting Oversight Board.

(xxxv) Absence of Accounting Issues. The chief executive officer, chief financial officer or general counsel of the Company, in consultation with the boards of directors of the company or its subsidiaries, where necessary, has confirmed that, except as set forth in the Registration Statement, the General Disclosure Package and the Final Prospectus, the Audit Committee of the Company is not reviewing or investigating and neither the Company’s or its subsidiaries’ independent auditors nor its internal auditors have recommended that a review or investigation regarding, (i) adding to, deleting, changing the application of, or changing the Company’s disclosure with respect to, any of the Company’s material accounting policies; (ii) any matter which could result in a restatement of the Company’s financial statements for any annual or interim period during the current or prior three fiscal years; or (iii) any Internal Control Event.

(xxxvi) Critical Accounting Policies. The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Registration Statement, General Disclosure Package and the Final Prospectus accurately, completely and fairly describes (i) the accounting policies that the Company believes are the most important in the portrayal of the Company’s financial condition and results of operations and that require management’s most difficult subjective or complex judgment; (ii) the material judgments and uncertainties affecting the application of critical accounting policies; (iii) all material trends, demands, commitments and events known to the Company, and uncertainties, and the potential effects thereof, that the Company believes would materially affect its liquidity and are reasonably likely to occur; and (iv) all off-balance sheet commitments and arrangements of the Company and its subsidiaries, if any. The Company’s directors and management have reviewed and agreed with the selection, application and disclosure of the Company’s critical accounting policies as described in the Registration Statement, the General Disclosure Package and the Final Prospectus and have consulted with its independent accountants with regards to such disclosure.

(xxxvii) No Transaction or Other Taxes. No transaction, stamp, capital or other issuance, registration, transaction, transfer, withholding or other taxes or duties are payable by or on behalf of the Underwriters to the government of the Cayman Islands or any political subdivision or taxing authority thereof or therein, any other jurisdiction in which the Company or any of its subsidiaries are organized, incorporated, engaged in business for tax purposes or otherwise resident for tax purposes, any jurisdiction from or through which a payment is made by or on behalf of the Company or any political subdivision thereof or therein having the authority to tax, in connection with (i) the creation, allotment and issuance of the Shares represented by the ADSs to be sold by the Company, (ii) the deposit with the Depositary and the custodian under the Deposit Agreement of the Shares represented by the ADSs by the Company against the issuance of ADRs evidencing the ADSs, (iii) the sale and delivery of the ADSs to the Underwriters, (iv) the resale and delivery of the ADSs by the Underwriters in the manner contemplated herein, or (v) the execution, delivery or performance of this Agreement or the Deposit Agreement, except that Cayman Islands stamp duty may be payable in the event that this Agreement or the Deposit Agreement is executed in or brought within the jurisdiction of the Cayman Islands.

 

11


(xxxviii) Litigation. There are no pending actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) against or affecting the Company, any of its subsidiaries, any of their respective directors or executive officers or any of their respective properties that, if determined adversely to the Company, such subsidiary such director or executive officer, would individually or in the aggregate have a Material Adverse Effect, or would materially and adversely affect the ability of the Company to perform its obligations under this Agreement, or which are otherwise material in the context of the sale of the Offered Securities; and no such actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) are to the knowledge of the Company or any of its subsidiaries, threatened or contemplated.

(xxxix) Financial Statements. The financial statements included in each Registration Statement and the General Disclosure Package and the Final Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations, stockholders’ equity and cash flows for the periods shown, and such financial statements have been prepared on a basis consistent with the financial statements and books and records of the Company, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) applied on a consistent basis and the applicable accounting requirements of the Act and the related rules and regulations adopted by the Commission and the schedules included in each Registration Statement present accurately and fairly, in all material respects, the information required to be stated therein. The selected financial data and summary financial information included in the Registration Statement and the Final Prospectus present accurately and fairly the information shown therein and have been derived from the audited financial statements included therein and the accounting records of the Company. No other historical or pro forma financial statements or supporting schedules are required to be included in the Registration Statement or the Final Prospectus under the Act or the rules and regulations promulgated thereunder. The Company does not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations) not described in the Registration Statement, the General Disclosure Package and the Final Prospectus.

(xl) No Material Adverse Change in Business. Since the end of the period covered by the latest audited financial statements included in the Registration Statement, the General Disclosure Package and the Final Prospectus (i) there has been no change, nor any development or event involving a prospective change, in the condition (financial or otherwise), results of operations, business, or properties of the Company and its subsidiaries, taken as a whole, that is material and adverse to the Company and its subsidiaries taken as a whole, (ii) except as disclosed in or contemplated by the Registration Statement, the General Disclosure Package and the Final Prospectus, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of shares in its share capital, (iii) there has been no purchase of its own issued and outstanding share capital made by the Company (iv) there has been no material adverse change in the revenue, employment benefit expense, share capital, short-term indebtedness, long-term indebtedness, cash and cash equivalents, net current assets or net assets of the Company and its subsidiaries taken as whole, (v) there has been no material transaction entered into and there is no material transaction that is probable of being entered into by the Company or any of its subsidiaries other than transactions in the ordinary course of business, (vi) there has been no obligation or liability, direct or contingent, that is material to the Company or any of its subsidiaries taken as a whole, incurred by the Company or any of its subsidiaries and (vii) neither the Company nor any of its subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority.

 

12


(xli) Investment Company Act. The Company is not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Registration Statement, the General Disclosure Package and the Final Prospectus, will not be required to register as an “investment company” as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).

(xlii) Related Party Transactions. Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, no material relationships or material transactions, direct or indirect, exist between any of the Company or its subsidiaries on the one hand and their respective shareholders, affiliates, officers and directors or any affiliates or family members of such persons on the other hand.

(xliii) PFIC Status. Based on the Company’s current and expected income and assets (including goodwill and taking into account the expected proceeds from this offering) and the expected market price of the Company’s ADSs following this offering, the Company does not expect to be a “passive foreign investment company” (“PFIC”) as defined in Section 1297 of the United States Internal Revenue Code of 1986, as amended (the “Code”), for the current taxable year or the foreseeable future.

(xliv) Taxes. The Company and each of its subsidiaries has paid all national, local, foreign and other taxes (except as would not have a Material Adverse Effect) and filed all material tax returns required to be paid (except as currently being contested in good faith and for which reserves required by IFRS have been created in the financial statements of the Company) or filed through the date of this Agreement, and no material tax deficiency has been, or could reasonably be expected to be, asserted against the Company or any of its subsidiaries.

(xlv) Insurance. The Company and its subsidiaries, taken as a whole, are insured for losses and risks, which insurance is in such amounts and insures against such losses and risks as the Company believes are prudent and customary for their industry to protect the Company and its subsidiaries and their respective businesses in which they are engaged; all policies of insurance and fidelity or surety bonds insuring the Company or any of its subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in compliance with the terms of such policies and instruments in all material respects; and there are no pending claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause which would have a Material Adverse Effect; neither the Company nor any such subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect, except in any such case as set forth in or contemplated in the Registration Statement, the General Disclosure Package and the Final Prospectus; and the Company will obtain directors’ and officers’ insurance in such amounts as is customary for an initial public offering, which may be obtained through any combination of third-party insurance, self-insurance coverage or captive insurance.

(xlvi) No Unlawful Payments. Neither the Company nor any of its subsidiaries, nor any director, officer, nor, to the knowledge of the Company, any affiliate, employee, agent, or other person acting on behalf of the Company or of any of its subsidiaries or affiliates, (i) has made any unlawful contribution, gift, entertainment or other unlawful expense; (ii) has taken or will take any action in furtherance of any unlawful offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, including to any government or regulatory official, including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office (“Governmental Official”) to influence official action or secure an improper advantage; (iii) is aware of or has taken any action, directly or indirectly, that has violated or is in violation of or would result in a violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, as amended, and the rules and regulations thereunder or any other applicable anti-bribery or anti-corruption law (collectively, the “Anti-Corruption Laws”); or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit, to any Government Official or other person or entity. The Company and its subsidiaries and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintain and will continue to maintain policies and procedures designed to promote and achieve compliance with all applicable anti-bribery and anti-corruption laws and with the representation and warranty contained herein. The Company and its subsidiaries will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any person in violation of any Anti-Corruption Laws.

 

13


(xlvii) Compliance with Anti-Money Laundering Laws. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental or regulatory agency in such jurisdictions (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental or regulatory agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company and its subsidiaries, threatened. The Company and its subsidiaries will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any person in violation of any Anti-Money Laundering Laws.

(xlviii) Economic Sanctions. Neither the Company nor any of its subsidiaries, nor any director or officer, thereof, nor, to the knowledge of the Company or any of its subsidiaries, any employee, agent, affiliate or representative of the Company or any of its subsidiaries, is an individual or entity (“Person”) that is, or is owned or controlled by a Person that is: the subject or target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union (including under Council Regulation (EC) No. 194/2008), Her Majesty’s Treasury, the Swiss Secretariat of Economic Affairs, the Hong Kong Monetary Authority, the Monetary Authority of Singapore, or other relevant sanctions or governmental authority (collectively, “Sanctions”), or engaged in any activities sanctionable under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, the Iran Sanctions Act, the Iran Threat Reduction and Syria Human Rights Act, or any applicable executive order, nor is the Company or any of its subsidiaries located, organized or resident in a country, region or territory that is, or whose government is, the subject or target of Sanctions including, without limitation, Cuba, Iran, North Korea, Sudan, Syria and Crimea (each a “Sanctioned Country”); and the Company and its subsidiaries will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person: (i) to fund or facilitate any activities or business of or with, or to finance any investments in, or make any payments to, any Person or in any country or territory that, at the time of such funding or facilitation, is, or whose government is, the subject or target of any Sanctions; (ii) to fund or facilitate any activities of or business or transactions in any Sanctioned Country or (iii) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise). For the past five years, the Company and its subsidiaries have not engaged in, are not now engaged in, and will not engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was, or whose government is or was, the subject or target of Sanctions, or with any Sanctioned Country. The Company and its subsidiaries further covenant not to engage, directly or indirectly, in any other activities that would result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise, except that in relation to any of the foregoing, the Company makes no covenant with respect to the Underwriters’ commissions after such commissions have been paid to the Underwriters).

 

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(xlix) Other Offerings. Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, the Company has not sold, issued or distributed any Securities during the six-month period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulation D or Regulation S of, the Act, other than Securities issued pursuant to employee benefit plans, qualified stock option plans or other employee compensation plans or pursuant to outstanding options, rights or warrants.

(l) Accuracy of Exhibits. There are no contracts or documents which are required to be described in the Registration Statement, the ADS Registration Statement, the General Disclosure Package or the Final Prospectus or to be filed as exhibits to the Registration Statement which have not been so described and filed as required.

(li) Payments of Dividends; Payments in Foreign Currency. Except as disclosed in the General Disclosure Package and the Final Prospectus, (i) none of the Company nor any of its subsidiaries is prohibited, directly or indirectly, from paying any dividends or making any other distributions on its share capital, making or repaying any loan or advance to the Company or any other subsidiary or transferring any of its properties or assets to the Company or any other subsidiary; (ii) under current laws and regulations of the Cayman Islands and any political subdivision thereof, all dividends and other distributions declared and payable on the Shares may be paid by the Company to the holder thereof in United States dollars and all such payments made to holders thereof or therein who are non-residents of the Cayman Islands will not be subject to income, withholding or other taxes under laws and regulations of the Cayman Islands or any political subdivision or taxing authority thereof or therein and will otherwise be free and clear of any other tax, duty, withholding or deduction in the Cayman Islands or any political subdivision or taxing authority thereof or therein and without the necessity of obtaining any governmental authorization; (iii) any enterprise income tax, if applicable to the Company or any of its subsidiaries, has been fully paid; (iv) any withholding tax applicable to the Company or any of its subsidiaries has been duly withheld; and (v) the Company has duly obtained and maintained effective its foreign exchange registration.

(lii) Choice of Law. The choice of the laws of the State of New York as the governing law of this Agreement and the Deposit Agreement is a valid choice of law under the laws of the Cayman Islands and will be observed and given effect to by courts in the Cayman Islands. The Company has the power to submit, and pursuant to Section 17 of this Agreement and Section 20 of the Deposit Agreement, has legally, validly, effectively and irrevocably submitted, to the personal jurisdiction of the U.S. District Court for the Southern District of New York and any state court located in The City and County of New York, and has validly and irrevocably waived any objection to the laying of venue of any suit, action or proceeding brought in any such court. The Company has the power to designate, appoint and empower, and pursuant to Section 17 of this Agreement and Section 21 of the Deposit Agreement, has legally, validly, effectively and irrevocably designated, appointed and empowered, Cogency Global Inc. as its authorized agent for service of process in any action arising out of or relating to this Agreement, the Deposit Agreement, the General Disclosure Package, the Final Prospectus, the Registration Statement, the ADS Registration Statement or the offering of the ADSs in the U.S. District Court for the Southern District of New York and any state court located in The City and County of New York. Service of process effected on such authorized agent will be effective to confer valid personal jurisdiction over the Company as provided in Section 17 of this Agreement and Section 20 of the Deposit Agreement.

 

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(liii) Enforceability of Judgment. Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, any final judgment for a fixed or readily calculable sum of money rendered by the U.S. District Court for the Southern District of New York or any state court located in The City and County of New York having jurisdiction under its own domestic laws in respect of any suit, action or proceeding against the Company based upon this Agreement or the Deposit Agreement and any instruments or agreements entered into for the consummation of the transactions contemplated herein and therein would be recognized and enforced against the Company, without re-examination or review of the merits of the cause of action in respect of which the original judgment was given by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided that such judgment (i) is given by a foreign court of competent jurisdiction, (ii) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (iii) is not in respect of taxes, a fine or a penalty, (iv) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands, and (v) is a final judgment.

 

  3.

Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements and subject to the terms and conditions set forth herein, the Company agrees to sell to the several Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price of US$             per ADS, that number of Firm Securities (rounded up or down, as determined by the Representatives in their discretion, in order to avoid fractions) obtained by multiplying             Firm Securities by a fraction the numerator of which is the number of Firm Securities set forth opposite the name of such Underwriter in Schedule 1 hereto and the denominator of which is the total number of Firm Securities.

In addition, upon written notice from the Representatives given to the Company from time to time not more than 30 days subsequent to the date of the Final Prospectus, the Underwriters may purchase all or less than all of the Optional Securities at the purchase price per share to be paid for the Firm Securities. The Company agrees to sell to the Underwriters the number of Optional Securities specified in such notice and the Underwriters agree, severally and not jointly, to purchase such Optional Securities. Such Optional Securities shall be purchased from the Company for the account of each Underwriter in the same proportion as the number of Firm Securities set forth opposite such Underwriter’s name bears to the total number of Firm Securities (subject to adjustment by the Representatives to eliminate fractions) and may be purchased by the Underwriters only for the purpose of covering over-allotments made in connection with the sale of the Firm Securities. No Optional Securities shall be sold or delivered unless the Firm Securities previously have been, or simultaneously are, sold and delivered. The right to purchase the Optional Securities or any portion thereof may be exercised from time to time and to the extent not previously exercised may be surrendered and terminated at any time upon notice by the Representatives to the Company.

The Firm Securities and any Optional Securities to be purchased by each Underwriter hereunder, in book-entry form, registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives, through the facilities of the Depository Trust Company (“DTC”), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the Company to the Representatives at least forty-eight hours in advance. The Company will cause the certificates, if any, representing the Firm Securities or the Optional Securities, as the case may be, to be made available for checking and packaging at least twenty-four hours prior to the Closing Date (as defined below) at the office of DTC or its designated custodian (the “Designated Office”). The time and date of delivery and payment shall be, with respect to the Firm Securities shall be 9:30 a.m., New York City time, on                     , 2021, and with respect to the Optional Securities, 9:30 a.m., New York time, on the date specified by the Representatives in each written notice given by the Representatives of the Underwriters’ election to purchase such Optional Securities, or in each case such other time and date as the Representatives and the Company may agree upon in writing. The time and date for delivery of the Firm Securities is herein called the “First Closing Date”. Each such time and date for delivery of the Optional Securities is herein called the “Optional Closing Date”, which may be the First Closing Date. The First Closing Date and each Optional Closing Date, if any, being sometimes referred to as a “Closing Date”.

As compensation for the Underwriters’ commitments, the Company will pay to the Representatives for the Underwriters’ proportionate accounts the sum of US$             per ADS times the total number of Offered Securities purchased by the Underwriters from the Company on each Closing Date. Such payment will be made on each Closing Date with respect to the Offered Securities purchased on such Closing Date.

 

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  4.

Offering by Underwriters. It is understood that the several Underwriters propose to offer the Offered Securities for sale to the public as set forth in the Final Prospectus.

 

  5.

Certain Agreements of the Company.

(a) The Company agrees with the several Underwriters that:

(i) Additional Filings. Unless filed pursuant to Rule 462(c) as part of the Additional Registration Statement in accordance with the next sentence, the Company will file the Final Prospectus, in a form approved by the Representatives, with the Commission pursuant to and in accordance with subparagraph (1) (or, if applicable and if consented to by the Representatives, subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the second business day following the execution and delivery of this Agreement or (B) the fifteenth business day after the Effective Time of the Initial Registration Statement. The Company will advise the Representatives promptly of any such filing pursuant to Rule 424(b) and provide satisfactory evidence to the Representatives of such timely filing. If an Additional Registration Statement is necessary to register a portion of the Offered Securities under the Act but the Effective Time thereof has not occurred as of the execution and delivery of this Agreement, the Company will file the Additional Registration Statement or, if filed, will file a post-effective amendment thereto with the Commission pursuant to and in accordance with Rule 462(b) on or prior to 10:00 p.m., New York time, on the date of this Agreement or, if earlier, on or prior to the time the Final Prospectus is finalized and distributed to any Underwriter, or will make such filing at such later date as shall have been consented to by the Representatives.

(ii) Filing of Amendments: Response to Commission Requests. The Company will promptly advise the Representatives of any proposal to amend or supplement at any time the Initial Registration Statement, the ADS Registration Statement, any Additional Registration Statement or any Statutory Prospectus and will not effect such amendment or supplementation without the Representatives’ consent (which consent shall not be unreasonably withheld or delayed); and the Company will also advise the Representatives promptly of (i) the effectiveness of any Additional Registration Statement (if its Effective Time is subsequent to the execution and delivery of this Agreement), (ii) any amendment or supplementation of a Registration Statement, the ADS Registration Statement or any Statutory Prospectus, (iii) any request by the Commission or its staff for any amendment to any Registration Statement or ADS Registration Statement, for any supplement to any Statutory Prospectus or for any additional information, (iv) the institution by the Commission of any stop order proceedings in respect of a Registration Statement or the threatening of any proceeding for that purpose, and (v) the receipt by the Company of any notification with respect to the suspension of the qualification of the Offered Securities in any jurisdiction or the institution or threatening of any proceedings for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof.

(iii) Continued Compliance with Securities Laws. If, at any time prior to the expiration of nine months after the time of issue of the Final Prospectus in connection with the offering or sale of the Offered Securities or at any time when a prospectus relating to the Offered Securities is (or but for the exemption in Rule 172 would be) required to be delivered under the Act by any Underwriter or dealer, any event occurs as a result of which the Final Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Registration Statement or supplement the Final Prospectus to comply with the Act, the Company will promptly notify the Representatives of such event and will promptly prepare and file with the Commission and furnish, at its own expense, to the Underwriters and the dealers and any other dealers upon request of the Representatives, an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance. Neither the Representatives’ consent to, nor the Underwriters’ delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6 hereof.

 

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(iv) Emerging Growth Company Status. The Company will promptly notify the Representatives if it ceases to be an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of the Offered Securities within the meaning of the Act and (ii) the last Closing Date.

(v) Rule 158. As soon as practicable, but not later than the Availability Date (as defined below), the Company will make generally available to its security holders an earnings statement covering a period of at least 12 months beginning after the Effective Time of the Initial Registration Statement (or, if later, the Effective Time of the Additional Registration Statement) which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. For the purpose of the preceding sentence, “Availability Date” means the 60th day after the end of the fourth fiscal quarter following the fiscal quarter that includes such Effective Time, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 120th day after the end of such fourth fiscal quarter.

(vi) Furnishing of Prospectuses. The Company will furnish to the Representatives copies of each Registration Statement (including all exhibits), each related Statutory Prospectus, and, so long as a prospectus relating to the Offered Securities is (or but for the exemption in Rule 172 would be) required to be delivered under the Act, the Final Prospectus and all amendments and supplements to such documents, in each case in such quantities as the Representatives reasonably request. The Final Prospectus shall be so furnished on or prior to 5:00 p.m., New York time, on or prior to the second business day following the execution and delivery of this Agreement. All other such documents shall be so furnished as soon as available. The Company will pay the expenses of printing and distributing to the Underwriters all such documents.

(vii) Blue Sky Qualifications. The Company will arrange for the qualification of the Offered Securities for sale under the laws of such jurisdictions as the Representatives reasonably designate and will continue such qualifications in effect so long as required for the distribution; provided that the Company shall not be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified or already required to be qualified or where it would be subject to taxation as a foreign corporation not otherwise required.

(viii) Listing. The Company will use its reasonable best efforts to list the ADSs for trading, subject to official notice of issuance, on the New York Stock Exchange.

(ix) Licensing. The Company will, upon request of any Underwriter, furnish, or cause to be furnished, to such Underwriter an electronic version of the Company’s trademarks, servicemarks and corporate logo for use on the website, if any, operated by such Underwriter for the purpose of facilitating the on-line offering of the Offered Securities; provided, however, that license to use such trademarks, servicemarks and corporate logo be used solely for the purpose described above, is granted without any fee and may not be assigned or transferred.

(x) Reporting Requirements. During the period of five years hereafter, the Company will furnish to the Representatives and, upon request, to each of the other Underwriters, as soon as practicable after the end of each fiscal year, a copy of its annual report to stockholders for such year; and the Company will furnish to the Representatives (i) as soon as available, a copy of each report and any definitive proxy statement of the Company filed with the Commission under the Exchange Act or mailed to stockholders, and (ii) from time to time, such other information concerning the Company as the Representatives may reasonably request. However, so long as the Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the Exchange Act and is timely filing reports with the Commission on its Electronic Data Gathering, Analysis and Retrieval system (or any successor system) (“EDGAR”), it is not required to furnish such reports or statements to the Underwriters.

 

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(xi) Payment of Expenses. The Company agrees with the several Underwriters that, whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company will pay all expenses incident to the performance of the obligations of the Company under this Agreement, including but not limited to (i) any filing fees and other expenses incurred in connection with qualification of the Offered Securities for sale under the laws of such jurisdictions as the Representatives designate and the preparation, printing, reproduction, mailing and delivery of memoranda relating thereto, (ii) costs and expenses related to the review by FINRA of the Offered Securities (including filing fees), (iii) costs and expenses relating to investor presentations or any “road show” in connection with the offering and sale of the Offered Securities including, without limitation, any travel expenses of the Company’s officers and employees, (iv) any other expenses of the Company including the fees and expenses incident to listing the Offered Securities on the New York Stock Exchange and other national and foreign exchanges, (v) fees and expenses in connection with the registration of the Offered Securities under the Exchange Act, (vi) all costs and expenses related to the transfer and delivery of the Offered Securities and the underlying Shares to the Underwriters, including any transfer or other taxes payable thereon, (vii) expenses incurred in distributing preliminary prospectuses and the Final Prospectus (including any amendments and supplements thereto) to the Underwriters, (viii) expenses incurred for preparing, printing and distributing any Issuer Free Writing Prospectuses to investors or prospective investors, and (ix) the cost of printing or producing any agreement among Underwriters, this Agreement, memoranda in connection with Blue Sky Qualifications, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Shares. It is understood, however, that except as provided in Sections 7, 9 and 11 hereof, if the transactions contemplated in this Agreement are consummated, each Underwriter agrees, severally and not jointly, to pay (i) first, its own costs and expenses incurred in connection with the offering of Securities hereby, including any advertising expenses connected with any offers it may make, (ii) second, the fees, expenses and disbursements of Hong Kong, Japan, People’s Republic of China, Spain and U.S. counsels for the Underwriters incurred in connection with the offering of Securities hereby and other capital markets exercises of the Company since March 2019 not consummated prior to this offering and (iii) third, the reasonable and documented fees and expenses of the Company’s counsels as to Canada, Cayman Islands, Malaysia, People’s Republic of China, Philippines, Singapore and Thailand laws incurred in connection with the offering of Securities hereby and other capital markets exercises of the Company since March 2019 not consummated prior to this offering, in the case of (ii) and (iii) in the same proportion as the number of Firm Securities set forth opposite such Underwriter’s name bears to the total number of Firm Securities (subject to adjustment by the Representatives to eliminate fractions) ((i), (ii) and (iii), collectively, the “Approved Expenses”), provided, however, that if the aggregate amount of Approved Expenses to be paid by an Underwriter exceeds 15.0% of such Underwriter’s underwriting discount and commission under this Agreement (the “Approved Expenses Limit”), the Company agrees that it shall pay all such Approved Expenses in excess of such Approved Expenses Limit. In this clause Section 5(a)(xi), “underwriting discount and commission” means US$             per ADS multiplied by the number of Firm Securities set forth opposite the name of such Underwriter in Schedule 1 hereto. For the avoidance of doubt, the fees and expenses of the Company’s counsels as to U.S. and New York State laws shall be paid by the Company. In addition to the foregoing, the Company will pay the fees and expenses of the QIU (as defined herein).

(xii) Use of Proceeds. The Company will use the net proceeds received by it in connection with this offering in the manner described in the “Use of Proceeds” section of the Registration Statement, the General Disclosure Package and the Final Prospectus, and except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus in respect of the Credit Suisse Facility (as defined in the Registration Statement, the General Disclosure Package and the Final Prospectus), the Company does not intend to use any of the proceeds from the sale of the Offered Securities hereunder to repay any outstanding debt owed to any Underwriter or affiliate of any Underwriter.

(xiii) Absence of Manipulation. The Company will not take, directly or indirectly, any action designed to or that would constitute or that would reasonably be expected to cause or result in, stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Offered Securities.

(xiv) Taxes. The Company will indemnify and hold harmless the Underwriters against any documentary, stamp or similar issue tax, including any interest and penalties, on the creation, issue and sale of the Offered Securities and on the execution and delivery of this Agreement. All payments to be made by the Company hereunder shall be made without withholding or deduction for or on account of any present or future taxes, duties or governmental charges whatsoever unless the Company is compelled by law to deduct or withhold such taxes, duties or charges. In that event, the Company shall pay such additional amounts as may be necessary in order that the net amounts received after such withholding or deduction shall equal the amounts that would have been received if no withholding or deduction had been made.

 

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(xv) (A) Restriction on Sale of Securities by Company. For the period commencing on the date hereof and continuing for 180 days after the date hereof or such earlier date that the Representatives consent to in writing (the “Lock-Up Period”), the Company will not, directly or indirectly, take any of the following actions with respect to the ADSs, the Shares or any securities of the Company that are substantially similar to the Offered Securities, the underlying Shares or any securities convertible into or exchangeable or exercisable for ADSs, Shares or other capital stock of the Company (collectively, “Lock-Up Securities”): (i) offer, sell, issue, pledge, contract to sell, contract to purchase, grant any option, right or warrant to purchase, lend, make any short sale or otherwise transfer or dispose of, directly or indirectly, Lock-Up Securities, (ii) enter into any swap, hedge or any other agreement that transfers, in whole or in part, the economic consequences of ownership of Lock-Up Securities, (iii) establish or increase a put equivalent position or liquidate or decrease a call equivalent position in Lock-Up Securities within the meaning of Section 16 of the Exchange Act or (iv) file with the Commission a registration statement under the Act relating to Lock-Up Securities, or publicly disclose the intention to take any such action, whether any such transaction described above is to be settled by delivery of ADSs, Shares or such other securities, in cash or otherwise (other than the Offered Securities to be sold hereunder) without the prior written consent of the Representatives, except (i) issuances of the ADSs and Shares underlying the ADSs in connection with the transactions contemplated hereby, (ii) issuances of Lock-Up Securities pursuant to the conversion or exchange of convertible or exchangeable securities or the exercise of warrants or options, in each case outstanding on the date hereof, (iii) grants of employee stock options pursuant to the terms of a plan in effect on the date hereof and disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, and issuances of Locked-Up Securities pursuant to the exercise of such options, and (iv) the issuance of warrants to Airbnb Inc. (or any of its affiliates) to acquire up to         % of the Company’s ordinary shares (calculated on a fully diluted and as-converted basis immediately following the Offering).

(B) Agreement to Announce Lock-up Waiver. If the Representatives, in their sole discretion, agree to release or waive the restrictions set forth in a lock-up agreement described in Section 6(n) hereof for an officer or director of the Company and provide the Company with notice of the impending release or waiver at least four business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit J hereto through a major news service or through other means permitted by FINRA at least two business days before the effective date of the release or waiver.

(xvi) Free Writing Prospectuses. The Company represents and agrees that, unless they obtain the prior consent of the Representatives, and each Underwriter represents and agrees that, unless it obtains the prior consent of the Company and the Representatives, it has not made and will not make any offer relating to the Offered Securities that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Company and the Representatives is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping. The Company represents that is has satisfied and agrees that it will satisfy the conditions in Rule 433 to avoid a requirement to file with the Commission any electronic road show.

 

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  6.

Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Firm Securities on the First Closing Date and the Optional Securities to be purchased on each Optional Closing Date will be subject to the accuracy of the representations and warranties of the Company herein (as though made on such Closing Date), to the accuracy of the statements of Company officers made pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions precedent:

(a) Accountants’ Comfort Letter. The Representatives shall have received letters, dated, respectively, the date hereof and each Closing Date, of Deloitte & Touche LLP confirming that they are a registered public accounting firm and independent public accountants within the meaning of the Securities Laws and in substantially the form attached hereto as Exhibit A (except that, in any letter dated a Closing Date, the specified date referred to in the comfort letters shall be a date no more than three business days prior to such Closing Date).

(b) Effectiveness of Registration Statement. If the Effective Time of the Additional Registration Statement (if any) is not prior to the execution and delivery of this Agreement, such Effective Time shall have occurred not later than 10:00 p.m., New York time, on the date of this Agreement or, if earlier, the time the Final Prospectus is finalized and distributed to any Underwriter, or shall have occurred at such later time as shall have been consented to by the Representatives. The Final Prospectus shall have been filed with the Commission in accordance with the Rules and Regulations and Section 5(a)(i) hereof. Prior to such Closing Date, no stop order suspending the effectiveness of a Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of any, the Company or the Representatives, shall be contemplated by the Commission.

(c) No Material Adverse Change. Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or otherwise), results of operations, business or properties of the Company and its subsidiaries taken as a whole which, in the judgment of the Representatives, is material and adverse and makes it impractical or inadvisable to market the Offered Securities; (ii) any downgrading in the rating of any debt securities of the Company by any “nationally recognized statistical rating organization” (as defined in Section 3(a)(62) of the Exchange Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (iii) any change in either U.S., Cayman Islands, Hong Kong, Singapore or international financial, political or economic conditions or currency exchange rates or exchange controls the effect of which is such as to make it, in the judgment of the Representatives, impractical to market or to enforce contracts for the sale of the Offered Securities, whether in the primary market or in respect of dealings in the secondary market; (iv) any suspension or material limitation of trading in securities generally on the New York Stock Exchange or the Nasdaq Stock Market, or any setting of minimum or maximum prices for trading on such exchange; (v) or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (vi) any banking moratorium declared by any U.S. federal, New York, Cayman Islands, Hong Kong or Singapore authorities; (vii) any major disruption of settlements of securities, payment or clearance services in the United States, Cayman Islands, Hong Kong, Singapore or any other country where such securities are listed or (viii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, Cayman Islands, Hong Kong, or Singapore, any declaration of war by Congress or any other national or international calamity or emergency if, in the judgment of the Representatives, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency is such as to make it impractical or inadvisable to market the Offered Securities or to enforce contracts for the sale of the Offered Securities.

(d) Opinion and 10b-5 Statement of U.S. Counsel for the Company. The Representatives shall have received a corporate opinion, negative assurance letter and opinion with respect to certain U.S. federal tax matters, each dated such Closing Date, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Company, in the forms attached hereto as Exhibit B.

(e) Opinion of Cayman Islands Counsel for the Company. The Representatives shall have received an opinion, dated such Closing Date, of Maples and Calder (Hong Kong) LLP, Cayman Islands counsel for the Company, in the form attached hereto as Exhibit C.

(f) Opinion of Singapore Counsel for the Company. The Representatives shall have received an opinion, dated such Closing Date, of Allen & Gledhill LLP, Singapore counsel for the Company, in the form attached hereto as Exhibit D.

 

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(g) Opinion of Thailand Counsel for the Company. The Representatives shall have received an opinion, dated such Closing Date, of Thanathip & Partners, Thailand counsel for the Company, in the form attached hereto as Exhibit E.

(h) Opinion of Malaysia Counsel for the Company. The Representatives shall have received an opinion, dated such Closing Date, of Rahmat Lim & Partners, Malaysia counsel for the Company, in the form attached hereto as Exhibit F.

(i) Opinion of Philippines Counsel for the Company. The Representatives shall have received an opinion, dated such Closing Date, of Picazo Buyco Tan Fider & Santos, Philippines counsel for the Company, in the form attached hereto as Exhibit G.

(j) Opinion of People’s Republic of China Counsel for the Company. The Representatives shall have received an opinion, dated such Closing Date, of Zhong Lun Law Firm, People’s Republic of China counsel for the Company, in the form attached hereto as Exhibit H.

(k) Opinion and 10b-5 Statement of U.S. Counsel for Underwriters. The Representatives shall have received from Latham & Watkins LLP, counsel for the Underwriters, such opinion or opinions and negative assurance letter, dated such Closing Date, with respect to such matters as the Representatives may require, in form and substance reasonably satisfactory to the Representatives, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

(l) Opinion of Depositary’s Counsel. The Representatives shall have received from Paul Hastings LLP, counsel for the Depositary, an opinion dated such Closing Date, with respect to such matters as the Representatives may require, in form and substance reasonably satisfactory to the Representatives.

(m) Officers’ Certificate. The Representatives shall have received a certificate, dated such Closing Date, of an executive officer of the Company and a principal financial or accounting officer of the Company in which such officers shall state that, to their knowledge, for and on behalf of the Company that: the representations and warranties of the Company in this Agreement are true and correct; the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date; no stop order suspending the effectiveness of any Registration Statement has been issued and no proceedings for that purpose have been instituted or, to their knowledge after reasonable investigation, are contemplated by the Commission; the Additional Registration Statement (if any) satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b) was timely filed pursuant to Rule 462(b), including payment of the applicable filing fee in accordance with Rule 456(a) or (b); and, subsequent to the date of the most recent financial statements in the General Disclosure Package and the Final Prospectus, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or otherwise), results of operations, business or properties of the Company and its subsidiaries taken as a whole except as set forth in the General Disclosure Package and the Final Prospectus or as described in such certificate.

(n) Lock-Up Agreements. On or prior to the date hereof, the Representatives shall have received lockup agreements in the form set forth on Exhibit I hereto from each executive officer, director, stockholder and other equity holder of the Company specified in Schedule 3 to this Agreement.

(o) Deposit Agreement. The Company and the Depositary shall have entered into the Deposit Agreement, and the Deposit Agreement shall be in full force and effect on the Closing Date. The Company shall have taken all actions necessary to permit the deposit of the Shares that will underlie the ADSs to be issued in accordance with the Deposit Agreement.

(p) Depositary Certificate. The Depositary shall have furnished or caused to be furnished to the Representatives a certificate of one of its authorized officers, in a form reasonably satisfactory to the Representatives, with respect to the deposit with it of the Shares against issuance of the ADSs, the execution, issuance and countersignature and delivery of the ADSs pursuant to the Deposit Agreement and such other matters related thereto as the Representatives may reasonably request.

 

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(q) Depositary Side Letter. The Company shall have entered into a side letter instructing the Depositary, for a period of 180 days after the date of the Final Prospectus, not to accept Shares for deposit under the Deposit Agreement for the purpose of issuance of ADSs unless the Company has consented to such deposit.

(r) No FINRA Objection. FINRA shall not have raised any objection with respect to the fairness or reasonableness of the underwriting arrangements or transactions contemplated hereby.

(s) FinCEN Certificate. On or before the date of this Agreement, the Representatives shall have received a certificate satisfying the beneficial ownership due diligence requirements of the Financial Crimes Enforcement Network (“FinCEN”) from the Company in form and substance reasonably satisfactory to the Representatives, along with such additional supporting documentation as the Representatives have reasonably requested in connection with the verification of the foregoing certificate.

(t) Requested Information. The Representatives and counsel for the Representatives shall have received such information, documents, certificates and opinions as they may reasonably require for the purpose of enabling them to pass upon the accuracy and completeness of any statement in the Registration Statement, the General Disclosure Package or the Final Prospectus or the issuance and sale of the Offered Securities or in order to evidence the accuracy of any of the representations or warranties or the satisfaction of any of the conditions or agreements contained herein.

(u) Chief Financial Officers Certificate. The Representatives shall have received on the date hereof and such Closing Date, as the case may be, certificates in the form set forth on Exhibit K, dated such date and signed by the chief financial officer of the Company, to his knowledge, on behalf of the Company that certain operating and financial data disclosed in the Registration Statement, the General Disclosure Package and the Final Disclosure Package have been derived from and verified against (or calculated based on data derived from and verified against) the Company’s accounting and business records, and such officer has no reason to believe that such data is untrue or inaccurate (giving effect to rounding where applicable).

(v) Listing Approval. The ADSs to be sold at such Closing Date shall have been duly listed, subject to official notice of issuance, on the New York Stock Exchange.

The Company will furnish the Representatives with such conformed copies of such opinions, certificates, letters and documents as the Representatives reasonably request. The Representatives may in their sole discretion waive on behalf of the Underwriters compliance with any conditions to the obligations of the Underwriters hereunder, whether in respect of an Optional Closing Date or otherwise.

 

  7.

Indemnification and Contribution.

(a) Indemnification of Underwriters by Company. The Company will indemnify and hold harmless each Underwriter, its partners, members, directors, officers, employees, agents, affiliates (including each broker-dealer of such Underwriter) and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each an “Indemnified Party”), against any and all losses, claims, damages and liabilities, joint or several, to which such Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any part of any Registration Statement at any time, the ADS Registration Statement as of any time, any Statutory Prospectus as of any time, the Final Prospectus, any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication, or arise out of or are based upon the omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Indemnified Party for any legal or documented other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending against any loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Indemnified Party is a party thereto), whether threatened or commenced, and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) below.

 

 

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(b) Indemnification of Company. Each Underwriter will severally and not jointly indemnify and hold harmless the Company, each of its directors and each of its officers who signs a Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an “Underwriter Indemnified Party”) against any losses, claims, damages and liabilities to which such Underwriter Indemnified Party may become subject, under the Act, the Exchange Act, or other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any part of any Registration Statement at any time, the ADS Registration Statement as of any time, any Statutory Prospectus as of any time, the Final Prospectus, any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication or arise out of or are based upon the omission or the alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives specifically for use therein, and will reimburse any legal or documented other expenses reasonably incurred by such Underwriter Indemnified Party in connection with investigating or defending against any such loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Underwriter Indemnified Party is a party thereto), whether threatened or commenced, based upon any such untrue statement or omission, or any such alleged untrue statement or omission as such expenses are incurred, it being understood and agreed that the only such information furnished by any Underwriter consists of the following information in the Final Prospectus furnished on behalf of each Underwriter: the concession and reallowance figures appearing in the seventh paragraph under the caption “Underwriting—Conflicts of Interest” and the information contained in the eleventh and twelfth paragraphs under the caption “Underwriting—Conflicts of Interest”.

(c) Actions against Parties; Notification. Promptly after receipt by an indemnified party under this Section 7 or Section 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under Section 7(a) or 7(b) above or Section 9, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under Section 7(a) or 7(b) above or Section 9 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under Section 7(a) or 7(b) above or Section 9. In case any such action is brought against any indemnified party and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 7 or Section 9 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party. No indemnifying party shall be liable for any settlement or compromise of, or consent to the entry of judgment with respect to, any such action or claim settled without its consent (not to be unreasonably withheld or delayed), but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for legal expenses as contemplated by Section 7(a) or 7(b) above in connection with the enforcement of such provision, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request for reimbursement and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement.

 

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(d) Contribution. If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under Section 7(a) or 7(b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in Section 7(a) or 7(b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this Section 7(d) shall be deemed to include any legal or documented other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this Section 7(d). Notwithstanding the provisions of this Section 7(d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this Section 7(d) to contribute are several in proportion to their respective underwriting obligations and not joint. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7(d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 7(d).

(e) Additional Liability. The obligations of the Company under this Section 7 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each Indemnified Party; and the obligations of the Underwriters under this Section 7 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each Underwriter Indemnified Party (including any person who, with his or her consent, is named in the Registration Statement as about to become a director of the Company).

 

  8.

Default of Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Offered Securities hereunder on either the First Closing Date or any Optional Closing Date and the aggregate number of Offered Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total number of Offered Securities that the Underwriters are obligated to purchase on such Closing Date, the Representatives may make arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons, including any of the Underwriters, but if no such arrangements are made by such Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting Underwriters agreed but failed to purchase on such Closing Date. If any Underwriter or Underwriters so default and the aggregate number of Offered Securities with respect to which such default or defaults occur exceeds 10% of the total number of Offered Securities that the Underwriters are obligated to purchase on such Closing Date and arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Company, except as provided in Section 10 (provided that if such default occurs with respect to Optional Securities after the First Closing Date, this Agreement will not terminate as to the Firm Securities or any Optional Securities purchased prior to such termination). As used in this Agreement, the term “Underwriter” includes any person substituted for an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default.

 

25


  9.

Qualified Independent Underwriter. The Company hereby confirms that at its request Goldman Sachs & Co. LLC has without compensation acted as “qualified independent underwriter” (in such capacity, the “QIU”) within the meaning of Rule 5121 of FINRA in connection with the offering of the Offered Securities. The Company will indemnify and hold harmless the QIU, its partners, members, directors, officers, employees, agents, affiliates (including each broker-dealer of such QIU) and each person, if any, who controls such QIU within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which the QIU may become subject, under the Act, the Exchange Act, other federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon the QIU’s acting (or alleged failing to act) as such “qualified independent underwriter” and will reimburse the QIU for any legal or documented other expenses reasonably incurred by the QIU in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, provided that in the case of an untrue statement or alleged untrue statement of any material fact contained in any part of any Registration Statement at any time, the ADS Registration Statement as of any time, any Statutory Prospectus as of any time, the Final Prospectus, any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication or arisen out of or are based upon the omission or the alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading.

 

  10.

Termination. The Underwriters may terminate this Agreement by notice given by the Representatives to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, any of the New York Stock Exchange or The Nasdaq Global Market, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a major disruption of settlements of securities, payment or clearance services in the United States, Cayman Islands, Hong Kong or Singapore shall have occurred, (iv) any banking moratorium shall have been declared by any U.S. federal, New York State, Cayman Islands, Hong Kong, or Singapore authorities or (v) there shall have occurred any outbreak or escalation of hostilities or act of terrorism involving the United States, Cayman Islands, Hong Kong or Singapore, any declaration of war by Congress or any other national or international calamity or emergency that, in the judgment of the Representatives, is such as to make it impractical or inadvisable to proceed with the offer, sale or delivery of the Offered Shares on the terms and in the manner contemplated in the Registration Statement, the General Disclosure Package or the Final Prospectus.

 

  11.

Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If the purchase of the Offered Securities by the Underwriters is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 10 hereof, the Company will reimburse the Underwriters for all out-of-pocket documented expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Offered Securities, and the respective obligations of the Company and the Underwriters pursuant to Section 7 hereof shall remain in effect. In addition, if any Offered Securities have been purchased hereunder, the representations and warranties in Section 2 and all obligations under Section 5 shall also remain in effect.

 

26


  12.

Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed to the Representatives, c/o Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282-2198, Attention: Registration Department and c/o Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: LCD-IBD, or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at 750D Chai Chee Road, #06-01/06 ESR BizPark @ Chai Chee, Singapore 469004; provided, however, that any notice to an Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to such Underwriter.

 

  13.

Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder.

 

  14.

Representation of Underwriters. The Representatives will act for the several Underwriters in connection with the transactions contemplated by this Agreement, and any action under this Agreement taken by the Representatives jointly will be binding upon all the Underwriters. No purchaser of any of the Offered Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.

 

  15.

Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

 

  16.

Absence of Fiduciary Relationship. The Company acknowledges and agrees that:

(a) No Other Relationship. The Representatives have been retained solely to act as underwriters in connection with the sale of the Offered Securities and that no fiduciary, advisory or agency relationship between the Company, on the one hand, and the Representatives, on the other, has been created in respect of any of the transactions contemplated by this Agreement or the Final Prospectus, irrespective of whether the Representatives have advised or are advising the Company on other matters;

(b) Arms’ Length Negotiations. The price of the Offered Securities set forth in this Agreement was established by Company following discussions and arms-length negotiations with the Representatives, and the Company is capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Agreement;

(c) Absence of Obligation to Disclose. The Company has been advised that the Representatives and their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and that the Representatives have no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and

(d) Waiver. The Company waives, to the fullest extent permitted by law, any claims it may have against the Representatives for breach of fiduciary duty or alleged breach of fiduciary duty and agree that the Representatives shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company, including stockholders, employees or creditors of the Company.

 

  17.

Applicable Law. This Agreement and any transaction contemplated by this Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of laws that would result in the application of any other law than the laws of the State of New York. The Company agrees that any suit or proceeding arising in respect of this Agreement or any transaction contemplated by this Agreement will be tried exclusively in the U.S. District Court for the Southern District of New York or, if that court does not have subject matter jurisdiction, in any state court located in The City and County of New York (New York Court) and the Company hereby submits to the non-exclusive jurisdiction of, and to venue in, such courts.

The Company irrevocably and unconditionally waives any objection to the laying of venue of any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in New York Court and irrevocably and unconditionally waives and agrees not to plead or claim in any New York Court that any such suit or proceeding in any such court has been brought in an inconvenient forum.

 

27


The Company irrevocably appoints Cogency Global Inc., as its authorized agent in The City and County of New York upon which process may be served in any such suit or proceeding, and agrees that service of process upon such agent, and written notice of said service to the Company by the person serving the same to the address provided in Section 12, shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. The Company further agrees to take any and all action as may be necessary to maintain such designation and appointment of such agent in full force and effect for a period of seven years from the date of this Agreement.

The obligation of the Company pursuant to this Agreement in respect of any sum due to any Underwriter shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day, following receipt by such Underwriter of any sum adjudged to be so due in such other currency, on which (and only to the extent that) such Underwriter may in accordance with normal banking procedures purchase United States dollars with such other currency; if the United States dollars so purchased are less than the sum originally due to such Underwriter hereunder, the Company agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Underwriter against such loss. If the United States dollars so purchased are greater than the sum originally due to such Underwriter hereunder, such Underwriter agrees to pay to the Company an amount equal to the excess of the dollars so purchased over the sum originally due to such Underwriter hereunder.

 

  18.

Waiver of Jury Trial. The Company hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

  19.

Time of the Essence. Time shall be of the essence of this Agreement.

 

  20.

Business Days(a) . As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

 

  21.

Prior Agreements. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with respect to the subject matter hereof.

 

  22.

Counterparts. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

 

  23.

Recognition of the U.S. Special Resolution Regimes.

(i) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

(ii) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

As used in this Section 23:

“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

 

28


“Covered Entity” means any of the following:

(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

[The remainder of this page intentionally left blank]

 

29


If the foregoing is in accordance with your understanding, please sign and return to us one for the Company and each of the Representatives plus one for each counsel and the Custodian counterparts hereof, and upon the acceptance hereof by the Representatives, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement among each of the Underwriters and the Company. It is understood that the Representatives’ acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination, upon request, but without warranty on the Representatives’ part as to the authority of the signers thereof

 

30


Very truly yours,
TDCX INC.
By:    
  Name:
  Title:

[Signature page to Underwriting Agreement]


The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written.
Acting on behalf of themselves and as the Representative of the several Underwriters.
GOLDMAN SACHS & CO. LLC
By:    
Name:  
Title:  

[Signature page to Underwriting Agreement]


Acting on behalf of themselves and as the Representative of the several Underwriters.
CREDIT SUISSE SECURITIES (USA) LLC
By:    
Name:  
Title:  

[Signature page to Underwriting Agreement]


SCHEDULE 1

 

Underwriter

   Number of
Firm Securities
to be Purchased
 

Goldman Sachs & Co. LLC

  

Credit Suisse Securities (USA) LLC

  

Total

  

 

34


SCHEDULE 2

General Use Free Writing Prospectuses (included in the General Disclosure Package)

“General Use Issuer Free Writing Prospectus” includes each of the following documents:

 

  1.

Final term sheet, dated ___________.

Other Information Included in the General Disclosure Package

The following information is also included in the General Disclosure Package

 

  1.

The initial price to the public of the Offered Securities is US$                 per ADS.

 

  2.

The number of Firm Securities purchased by the Underwriters is                 .


SCHEDULE 3

[____]

 

36


EXHIBIT A

Form of Comfort Letter

 

37


EXHIBIT B

Form of Opinions of U.S. Counsel to the Company

 

38


EXHIBIT C

Form of Opinion of Cayman Islands Counsel for the Company

 

39


EXHIBIT D

Form of Opinion of Singapore Counsel for the Company

 

40


EXHIBIT E

Form of Opinion of Thailand Counsel for the Company

 

41


EXHIBIT F

Form of Opinion of Malaysia Counsel for the Company

 

42


EXHIBIT G

Form of Opinion of Philippines Counsel for the Company

 

43


EXHIBIT H

Form of Opinion of People’s Republic of China Counsel for the Company

 

44


EXHIBIT I

Form of Lock-Up Agreement

[Insert date]

TDCX Inc.

c/o CEO, TDCX Holdings Pte. Ltd.

750D Chai Chee Road

#06-01/06

ESR BizPark @Chai Chee

Singapore 469004

Goldman Sachs & Co. LLC

Credit Suisse Securities (USA) LLC

c/o Goldman Sachs & Co. LLC

200 West Street

New York, N.Y. 10282-2198

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, N.Y. 10010-3629

Ladies and Gentlemen:

As an inducement to the underwriters to execute the Underwriting Agreement (the “Underwriting Agreement”), pursuant to which an offering (the “Offering”) will be made that is intended to result in the establishment of a public market for                 American Depositary Shares (“ADSs”), each representing                 Class A ordinary shares (“Shares”), par value US$                 per share (the ADSs, the Shares and any security convertible into or exercisable or exchangeable for ADSs or Shares, the “Securities”) of TDCX Inc., and any successor (by merger or otherwise) thereto, (the “Company”), the undersigned hereby agrees that during the period specified in the following paragraph (the “Lock-Up Period”), the undersigned will not (i) offer, sell, issue, pledge, contract to sell, contract to purchase, grant any option, right or warrant to purchase, lend, make any short sale or otherwise transfer or dispose of Securities directly owned by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the Securities and Exchange Commission, (ii) enter into any swap, hedge or any other agreement that transfers, in whole or in part, the economic consequences of ownership of the Securities, or (iii) file with the Commission a registration statement under the Act relating to the Securities, or publicly disclose the intention to take any such action, whether any such transaction described above is to be settled by delivery of the Securities, any shares underlying the Securities or any other securities, in cash or otherwise without, in each case, the prior written consent of Goldman Sachs & Co. LLC (“Goldman Sachs”) and Credit Suisse Securities (USA) LLC (“Credit Suisse”). Unless otherwise defined, capitalized terms used herein shall have the definitions set forth in the Underwriting Agreement.

The Lock-Up Period will commence on the date of this Lock-Up Agreement and continue and include the date that is 180 days after the public offering date set forth on the final prospectus used to sell the Securities (the “Public Offering Date”) pursuant to the Underwriting Agreement.

 

45


Any Securities received upon exercise of options granted to the undersigned will also be subject to this Lock-Up Agreement. The foregoing restrictions shall not apply to (a) any Securities acquired by the undersigned in the open market will not be subject to this Lock-Up Agreement, (b) transfers of Securities to a family member or trust, will or intestacy or by bona fide gift may be made, (c) if the undersigned is a partnership, limited liability company or corporation, distributions or transfers of Securities to partners, members or shareholders of, or affiliates (as defined in Rule 12b-2 under the Exchange Act) wholly-owned or majority-owned by, the undersigned, (d) transfers to an entity beneficially owned and controlled by the undersigned, (e) transfers of Securities by operation of law, including pursuant to an order of a court (including a domestic order or a negotiated divorce settlement) or regulatory agency; provided that in the case of any transfer or distribution pursuant to clauses (b), (c), (d) or (e), the donee, distributee or transferee agrees to be bound in writing by the terms of a lock-up letter in the form of this Lock-up Agreement for the remainder of the Lock-up Period prior to such transfer, such transfer shall not involve a disposition for value and no filing by any party (donor, donee, transferor or transferee) under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) shall be required or shall be voluntarily made in connection with such transfer (other than a filing on a Form 5 made after the expiration of the Lock-Up Period); (f) any sale of Securities by the undersigned to the Underwriters contemplated under the Underwriting Agreement, (g) transfers of Securities to the Company pursuant to any contractual arrangement that provides for the repurchase of the undersigned’s Securities by the Company in connection with the termination of the undersigned’s employment or directorship with the Company or any subsidiaries or consolidated affiliated entity of the Company as described in the Final Prospectus, (h) the exercise of any rights to acquire any undersigned’s Securities by means of cash and cashless exercise, or exchange or conversion of any stock options or any other securities convertible into or exchangeable or exercisable for the undersigned’s Securities granted pursuant to the Company’s equity incentive plans, provided that any Securities received by the undersigned upon such exercise, exchange or conversion shall be subject to the terms of this Lock-up Agreement, (i) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Securities, provided that such plan provides that no transfer of Shares may be effected during the Lock-up Period and no filing under the Exchange Act or other public announcements shall be required or shall be voluntarily made by or on behalf of the undersigned or the Company regarding the establishment of such plan during the Lock-up Period, or (j) transfers in connection with the reclassification of all of the outstanding ordinary shares of the Company into Class A ordinary shares and Class B ordinary shares immediately prior to the consummation of the Offering, which reclassification is described in the Final Prospectus, provided that all Class A ordinary shares, Class B ordinary shares and shares of any other class of capital stock received upon such reclassification shall be subject to the restrictions of this Lock-up Agreement. For purposes of this Lock-Up Agreement, a “family member” shall mean any relationship by blood, marriage, domestic partnership or adoption, not more remote than first cousin. Furthermore, Securities sold to the Company or tendered to the Company by the undersigned or withheld by the Company, in each case for tax withholding purposes in connection with the vesting of equity awards that are subject to a taxable event upon vesting, will not be subject to this Lock-up Agreement.

In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to make any transfer of Securities if such transfer would constitute a violation or breach of this Lock-Up Agreement.

If the undersigned is an officer or director of the Company, the undersigned further agrees that the foregoing restrictions in this Lock-Up Agreement shall be equally applicable to any issuer-directed Securities the undersigned may purchase in the above-referenced offering.

If the undersigned is an officer or director of the Company, (i) Goldman Sachs and Credit Suisse agree that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of Securities, Goldman Sachs and Credit Suisse will notify the Company of the impending release or waiver, and (ii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by Goldman Sachs and Credit Suisse hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this Lock-Up Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer.

This Lock-Up Agreement shall be binding on the undersigned and the successors, heirs, personal representatives and assigns of the undersigned.

Notwithstanding anything herein to the contrary, if (i) the Offering has not occurred on or prior to June 30, 2022, (ii) the Company files an application to withdraw the Registration Statement on Form F-1 relating to the Public Offering after consultation with the Representatives, (iii) subsequent to signing the Underwriting Agreement, the Underwriting Agreement (other than the provisions thereof which survive termination) is terminated prior to payment for and delivery of the ADS to be sold thereunder, whichever is the earliest, then, this Lock-up Agreement shall terminate and be of no further force or effect, and the undersigned shall be released from all obligations hereunder.

 

46


This agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

[Signature page follows]

 

47


Very truly yours,

 

IF AN INDIVIDUAL:     IF AN ENTITY:
By:                 
  (duly authorized signature)       (please print complete name of entity)
Name:         By:    
 

(please print full name)

     

(duly authorized signature)

     

Name:

   
       

(please print full name)

Address:

       

Address:

   
       
       

 

48


EXHIBIT J    

Form of Press Release

TDCX Inc.

[Date]

TDCX Inc. (the “Company”) announced today that Goldman Sachs and Credit Suisse, the lead book-running managers in the Company’s recent public sale of                 American Depositary Shares (“ADSs”), each representing                 Class A ordinary shares, par value US$                 per share (“Shares”), is [waiving] [releasing] a lock-up restriction with respect to the Shares held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on ,                20    , and the Shares may be sold, directly or in the form of ADSs, on or after such date.

This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.

 

49


EXHIBIT K

Form of CFO Certificate

CHIEF FINANCIAL OFFICER’S CERTIFICATE

[Date]

I, Tze Neng Chin, chief financial officer of TDCX Inc., an exempted company with limited liability incorporated and existing under the laws of the Cayman Islands (the “Company”), am providing this certificate in connection with the initial public offering of                 American Depositary Shares, each representing                  Class A ordinary shares, par value US$                 per share, of the Company (the “Offering”), pursuant to Section 6(u) of the underwriting agreement (the “Underwriting Agreement), dated as of                 , 2021, entered into by and among the Company and Goldman Sachs & Co. LLC and Credit Suisse Securities (USA) LLC, as representatives of the several underwriters named therein (the “Underwriters”), and I hereby certify for and on behalf of the Company (and not in a personal capacity) that:

(a) I am responsible for, among other things, financial and accounting matters of the Company and am familiar with the accounting, operations and records systems and internal controls over financial reporting of the Company.

(b) I have participated in the preparation of the Registration Statement, the General Disclosure Package and the Final Prospectus and reviewed the disclosure therein.

(c) I have supervised the compilation of and reviewed the circled amounts, percentages, ratios, statistical data, operating data and financial figures contained in the Registration Statement, the General Disclosure Package and the Final Prospectus relating to the Offering set forth in Annex A attached hereto and have performed the following procedures:

I have compared the amount, percentage or ratio to, or computed the amount, percentage or ratio from, and verified the amount, percentage or ratio against (or calculated based on data derived from and verified against), (i) the Company’s accounting books and records prepared by the Company’s accounting personnel, or (ii) the corresponding data and other records maintained by the Company, as applicable, for the periods, or as of the dates, indicated and found such information to be in agreement, and I have no reason to believe that such information is untrue, incomplete or inaccurate (giving effect to rounding where applicable).

Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in the Underwriting Agreement. This certificate is to assist the Underwriters in conducting and documenting their investigation of the affairs of the Company in connection with the Offering.

[Signature page follows]


EX-3.2

Exhibit 3.2

THE COMPANIES ACT (AS REVISED)

OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

SECOND AMENDED AND RESTATED

MEMORANDUM OF ASSOCIATION

OF

TDCX Inc.

(adopted by a Special Resolution passed on September 6 and effective immediately prior to the completion of the initial public offering of the Company’s American Depositary Shares representing its Class A Ordinary Shares)

 

1.

The name of the Company is TDCX Inc.

 

2.

The Registered Office of the Company will be situated at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other location within the Cayman Islands as the Directors may from time to time determine.

 

3.

The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Act or any other law of the Cayman Islands.

 

4.

The Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit as provided by the Companies Act.

 

5.

The Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this section shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands.

 

6.

The liability of each Shareholder is limited to the amount, if any, unpaid on the Shares held by such Shareholder.

 

7.

The authorised share capital of the Company is US$50,000 divided into 500,000,000 shares comprising (i) 50,000,000 Class A Ordinary Shares of a par value of US$0.0001 each, (ii) 200,000,000 Class B Ordinary Shares of a par value of US$0.0001 each and (iii) 250,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with Article 9 of the Articles. Subject to the Companies Act and the Articles, the Company shall have power to redeem or purchase any of its Shares and to increase or reduce its authorised share capital and to sub-divide or consolidate the said Shares or any of them and to issue all or any part of its capital whether original, redeemed, increased or reduced with or without any preference, priority, special privilege or other rights or subject to any postponement of rights or to any conditions or restrictions whatsoever and so that unless the conditions of issue shall otherwise expressly provide every issue of shares whether stated to be ordinary, preference or otherwise shall be subject to the powers on the part of the Company hereinbefore provided.

 

8.

The Company has the power contained in the Companies Act to deregister in the Cayman Islands and be registered by way of continuation in some other jurisdiction.

 

9.

Capitalised terms that are not defined in this Memorandum of Association bear the same meanings as those given in the Articles of Association of the Company.


THE COMPANIES ACT (AS REVISED)

OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

SECOND AMENDED AND RESTATED

ARTICLES OF ASSOCIATION

OF

TDCX Inc.

(adopted by a Special Resolution passed on September 6 and effective immediately prior to the completion of the initial public offering of the Company’s American Depositary Shares representing its Class A Ordinary Shares)

TABLE A

The regulations contained or incorporated in Table ‘A’ in the First Schedule of the Companies Act shall not apply to the Company and the following Articles shall comprise the Articles of Association of the Company.

INTERPRETATION

 

1.

In these Articles the following defined terms will have the meanings ascribed to them, if not inconsistent with the subject or context:

 

“ADS”    means an American Depositary Share representing Class A Ordinary Shares;
“Affiliate”    means in respect of a Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person, and (i) in the case of a natural person, shall include, without limitation, such person’s spouse, parents, children, grandchildren or other lineal descendants, siblings, mother-in-law, father-in-law, brothers-in-law and sisters-in-law, a trust for the benefit of any of the foregoing, and a corporation, partnership or any other entity wholly or jointly owned by any of the foregoing, and (ii) in the case of an entity, shall include a partnership, a corporation or any other entity or any natural person which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity. The term “control” shall mean the ownership, directly or indirectly, of shares possessing more than fifty per cent (50%) of the voting power of the corporation, partnership or other entity (other than, in the case of a corporation, securities having such power only by reason of the happening of a contingency), or having the power to control the management or elect a majority of members to the board of directors or equivalent decision-making body of such corporation, partnership or other entity;
“Articles”    means these articles of association of the Company, as amended or substituted from time to time;
“Board” and “Board of Directors” and “Directors”    means the directors of the Company for the time being, or as the case may be, the directors assembled as a board or as a committee thereof;
“Chairman”    means the chairman of the Board of Directors;

 

2


“Class” or “Classes”    means any class or classes of Shares as may from time to time be issued by the Company;
“Class A Ordinary Share”    means an Ordinary Share of a par value of US$0.0001 in the capital of the Company, designated as a Class A Ordinary Shares and having the rights provided for in these Articles;
“Class B Ordinary Share”    means an Ordinary Share of a par value of US$0.0001 in the capital of the Company, designated as a Class B Ordinary Share and having the rights provided for in these Articles;
“Commission”    means the Securities and Exchange Commission of the United States of America or any other federal agency for the time being administering the Securities Act and/or the Securities Exchange Act;
“Communication Facilities”    means video, video-conferencing, internet or online conferencing applications, telephone or tele-conferencing and/or any other video-communications, internet or online conferencing application or telecommunications facilities by means of which all Persons participating in a meeting are capable of hearing and being heard by each other;
“Company”    means TDCX Inc., a Cayman Islands exempted company;
“Companies Act”    means the Companies Act (As Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof;
“Company’s Website”    means the main corporate/investor relations website of the Company, the address or domain name of which has been disclosed in any registration statement filed by the Company with the Commission in connection with its initial public offering of ADSs, or which has otherwise been notified to Shareholders;
“Designated Stock Exchange”    means the stock exchange in the United States on which any Shares or ADSs are listed for trading;
“Designated Stock Exchange Rules”    means the relevant code, rules and regulations, as amended, from time to time, applicable as a result of the original and continued listing of any Shares or ADSs on the Designated Stock Exchange;
“electronic”    has the meaning given to it in the Electronic Transactions Act and any amendment thereto or re-enactments thereof for the time being in force and includes every other law incorporated therewith or substituted therefor;
“electronic communication”    means electronic posting to the Company’s Website, transmission to any number, address or internet website or other electronic delivery methods as otherwise decided and approved by not less than two-thirds of the vote of the Board;
“Electronic Transactions Act”    means the Electronic Transactions Act (As Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof;
“electronic record”    has the meaning given to it in the Electronic Transactions Act and any amendment thereto or re-enactments thereof for the time being in force and includes every other law incorporated therewith or substituted therefor;
“Memorandum of Association”    means the memorandum of association of the Company, as amended or substituted from time to time;

 

3


“Ordinary Resolution”   

means a resolution:

 

(a)   passed by a simple majority of the votes cast by such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorised representatives, at a general meeting of the Company held in accordance with these Articles; or

  

(b)   approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the resolution so adopted shall be the date on which the instrument, or the last of such instruments, if more than one, is executed;

“Ordinary Share”    means a Class A Ordinary Share or a Class B Ordinary Share;
“paid up”    means paid up as to the par value in respect of the issue of any Shares and includes credited as paid up;
“Person”    means any natural person, firm, company, joint venture, partnership, corporation, association or other entity (whether or not having a separate legal personality) or any of them as the context so requires;
“Present”    means, in respect of any Person, such Person’s presence at a general meeting of Shareholders (or any meeting of the holders of any Class of Shares), which may be satisfied by means of such Person or, if a corporation or other non-natural Person, its duly authorized representative (or, in the case of any Shareholder, a proxy which has been validly appointed by such Shareholder in accordance with these Articles), being: (a) physically present at the meeting; or (b) in the case of any meeting at which Communication Facilities are permitted in accordance with these Articles, including any Virtual Meeting, connected by means of the use of such Communication Facilities;
“Register”    means the register of Members of the Company maintained in accordance with the Companies Act;
“Registered Office”    means the registered office of the Company as required by the Companies Act;
“Seal”    means the common seal of the Company (if adopted) including any facsimile thereof;
“Secretary”    means any Person appointed by the Directors to perform any of the duties of the secretary of the Company;
“Securities Act”    means the Securities Act of 1933 of the United States of America, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time;
“Securities Exchanges Act”    means the Securities Exchange Act of 1934 of the United States of America, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time;
“Share”    means a share in the capital of the Company. All references to “Shares” herein shall be deemed to be Shares of any or all Classes as the context may require. For the avoidance of doubt in these Articles the expression “Share” shall include a fraction of a Share;

 

4


“Shareholder” or “Member”    means a Person who is registered as the holder of one or more Shares in the Register;
“Share Premium Account”    means the share premium account established in accordance with these Articles and the Companies Act;
“signed”    means bearing a signature or representation of a signature affixed by mechanical means or an electronic symbol or process attached to or logically associated with an electronic communication and executed or adopted by a Person with the intent to sign the electronic communication;
“Special Resolution”   

means a special resolution of the Company passed in accordance with the Companies Act, being a resolution:

 

(a)   passed by not less than two-thirds of the votes cast by such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorised representatives, at a general meeting of the Company of which notice specifying the intention to propose the resolution as a special resolution has been duly given; or

 

(b)   approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the special resolution so adopted shall be the date on which the instrument or the last of such instruments, if more than one, is executed;

“Treasury Share”    means a Share held in the name of the Company as a treasury share in accordance with the Companies Act; and
“United States”    means the United States of America, its territories, its possessions and all areas subject to its jurisdiction.
“Virtual Meeting”    means any general meeting of the Shareholders (or any meeting of the holders of any Class of Shares) at which the Shareholders (and any other permitted participants of such meeting, including without limitation the chairman of the meeting and any Directors) are permitted to attend and participate solely by means of Communication Facilities.

 

2.

In these Articles, save where the context requires otherwise:

 

  (a)

words importing the singular number shall include the plural number and vice versa;

 

  (b)

words importing the masculine gender only shall include the feminine gender and any Person as the context may require;

 

  (c)

the word “may” shall be construed as permissive and the word “shall” shall be construed as imperative;

 

  (d)

reference to a dollar or dollars (or US$) and to a cent or cents is reference to dollars and cents of the United States of America;

 

  (e)

reference to a statutory enactment shall include reference to any amendment or re-enactment thereof for the time being in force;

 

  (f)

reference to any determination by the Directors shall be construed as a determination by the Directors in their sole and absolute discretion and shall be applicable either generally or in any particular case;

 

5


  (g)

reference to “in writing” shall be construed as written or represented by any means reproducible in writing, including any form of print, lithograph, email, facsimile, photograph or telex or represented by any other substitute or format for storage or transmission for writing including in the form of an electronic record or partly one and partly another;

 

  (h)

any requirements as to delivery under the Articles include delivery in the form of an electronic record or an electronic communication;

 

  (i)

any requirements as to execution or signature under the Articles, including the execution of the Articles themselves, can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Act; and

 

  (j)

Sections 8 and 19(3) of the Electronic Transactions Act shall not apply.

 

3.

Subject to the last two preceding Articles, any words defined in the Companies Act shall, if not inconsistent with the subject or context, bear the same meaning in these Articles.

PRELIMINARY

 

4.

The business of the Company may be conducted as the Directors see fit.

 

5.

The Registered Office shall be at such address in the Cayman Islands as the Directors may from time to time determine. The Company may in addition establish and maintain such other offices and places of business and agencies in such places as the Directors may from time to time determine.

 

6.

The expenses incurred in the formation of the Company and in connection with the offer for subscription and issue of Shares shall be paid by the Company. Such expenses may be amortised over such period as the Directors may determine and the amount so paid shall be charged against income and/or capital in the accounts of the Company as the Directors shall determine.

 

7.

The Directors shall keep, or cause to be kept, the Register at such place as the Directors may from time to time determine and, in the absence of any such determination, the Register shall be kept at the Registered Office.

SHARES

 

8.

Subject to these Articles, all Shares for the time being unissued shall be under the control of the Directors who may, in their absolute discretion and without the approval of the Members, cause the Company to:

 

  (a)

issue, allot and dispose of Shares (including, without limitation, preferred shares) (whether in certificated form or non-certificated form) to such Persons, in such manner, on such terms and having such rights and being subject to such restrictions as they may from time to time determine;

 

  (b)

grant rights over Shares or other securities to be issued in one or more classes or series as they deem necessary or appropriate and determine the designations, powers, preferences, privileges and other rights attaching to such Shares or securities, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers, preferences, privileges and rights associated with the then issued and outstanding Shares, at such times and on such other terms as they think proper; and

 

  (c)

grant options with respect to Shares and issue warrants or similar instruments with respect thereto.

 

6


9.

The Directors may authorise the division of Shares into any number of Classes and the different Classes shall be authorised, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different Classes (if any) may be fixed and determined by the Directors or by an Ordinary Resolution. The Directors may issue Shares with such preferred or other rights, all or any of which may be greater than the rights of Ordinary Shares, at such time and on such terms as they may think appropriate. Notwithstanding Article 17, the Directors may issue from time to time, out of the authorised share capital of the Company (other than the authorised but unissued Ordinary Shares), series of preferred shares in their absolute discretion and without approval of the Members; provided, however, before any preferred shares of any such series are issued, the Directors shall by resolution of Directors determine, with respect to any series of preferred shares, the terms and rights of that series, including:

 

  (a)

the designation of such series, the number of preferred shares to constitute such series and the subscription price thereof if different from the par value thereof;

 

  (b)

whether the preferred shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may be general or limited;

 

  (c)

the dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, and the preference or relation which such dividends shall bear to the dividends payable on any shares of any other class or any other series of shares;

 

  (d)

whether the preferred shares of such series shall be subject to redemption by the Company, and, if so, the times, prices and other conditions of such redemption;

 

  (e)

whether the preferred shares of such series shall have any rights to receive any part of the assets available for distribution amongst the Members upon the liquidation of the Company, and, if so, the terms of such liquidation preference, and the relation which such liquidation preference shall bear to the entitlements of the holders of shares of any other class or any other series of shares;

 

  (f)

whether the preferred shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof;

 

  (g)

whether the preferred shares of such series shall be convertible into, or exchangeable for, shares of any other class or any other series of preferred shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange;

 

  (h)

the limitations and restrictions, if any, to be effective while any preferred shares of such series are outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of, the existing shares or shares of any other class of shares or any other series of preferred shares;

 

  (i)

the conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issue of any additional shares, including additional shares of such series or of any other class of shares or any other series of preferred shares; and

 

  (j)

any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof;

and, for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued. The Company shall not issue Shares to bearer.

 

10.

The Company may insofar as may be permitted by law, pay a commission to any Person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any Shares. Such commissions may be satisfied by the payment of cash or the lodgment of fully or partly paid-up Shares or partly in one way and partly in the other. The Company may also pay such brokerage as may be lawful on any issue of Shares.

 

7


11.

The Directors may refuse to accept any application for Shares, and may accept any application in whole or in part, for any reason or for no reason.

CLASS A ORDINARY SHARES AND CLASS B ORDINARY SHARES

 

12.

Holders of Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Members. Each Class A Ordinary Share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of the Company, and each Class B Ordinary Share shall entitle the holder thereof to ten (10) votes on all matters subject to vote at general meetings of the Company.

 

13.

Each Class B Ordinary Share is convertible into one (1) Class A Ordinary Share at any time at the option of the holder thereof. The right to convert shall be exercisable by the holder of the Class B Ordinary Share delivering a written notice to the Company that such holder elects to convert a specified number of Class B Ordinary Shares into Class A Ordinary Shares. In no event shall Class A Ordinary Shares be convertible into Class B Ordinary Shares.

 

14.

Any conversion of Class B Ordinary Shares into Class A Ordinary Shares pursuant to these Articles shall be effected by means of the re-designation of each relevant Class B Ordinary Share as a Class A Ordinary Share. Such conversion shall become effective forthwith upon entries being made in the Register to record the re-designation of the relevant Class B Ordinary Shares as Class A Ordinary Shares.

 

15.

Upon (a) any sale, transfer, assignment or disposition of any Class B Ordinary Share by a Shareholder to any person who is not an Affiliate of such Shareholder, or upon a change of ultimate beneficial ownership of any Class B Ordinary Share to any Person who is not an Affiliate of the registered shareholder of such Class B Ordinary Share, such Class B Ordinary Share shall be automatically and immediately converted into one Class A Ordinary Share. Upon the first to occur of (b) the date that is 15 years after the date of effectiveness of the registration statement on the Form F-1 filed with the Commission by the Company; or (c) the date that is nine months after the death or permanent disability of Mr. Laurent Junique, all Class B Ordinary Shares then issued and outstanding shall be automatically and immediately converted into the same number of Class A Ordinary Shares. For the avoidance of doubt, (i) a sale, transfer, assignment or disposition shall be effective upon the Company’s registration of such sale, transfer, assignment or disposition in its Register; and (ii) the creation of any pledge, charge, encumbrance or other third party right of whatever description on any Class B Ordinary Shares to secure a holder’s contractual or legal obligations shall not be deemed as a sale, transfer, assignment or disposition unless and until any such pledge, charge, encumbrance or other third party right is enforced and results in the third party holding legal title to the relevant Class B Ordinary Shares, in which case all the related Class B Ordinary Shares shall be automatically converted into the same number of Class A Ordinary Shares. For purpose of this Article 15, (i) beneficial ownership shall be determined as set forth in Rule 13d-3 under the United States Securities Exchange Act of 1934, as amended, and (ii) the Board shall be entitled to determine the date of permanent disability of Mr. Laurent Junique and any such determination by the Board shall be conclusive and binding on the Shareholders.

 

16.

Save and except for voting rights and conversion rights as set out in Articles 12 to 15 (inclusive), the Class A Ordinary Shares and the Class B Ordinary Shares shall rank pari passu with one another and shall have the same rights, preferences, privileges and restrictions.

MODIFICATION OF RIGHTS

 

17.

Whenever the capital of the Company is divided into different Classes the rights attached to any such Class may, subject to any rights or restrictions for the time being attached to any Class, only be materially adversely varied with the consent in writing of the holders of at least two-thirds of the issued Shares of that Class or with the sanction of a Ordinary Resolution passed at a separate meeting of the holders of the Shares of that Class. To every such separate meeting all the provisions of these Articles relating to general meetings of the Company or to the proceedings thereat shall, mutatis mutandis, apply, except that the necessary quorum shall be one or more Persons holding or representing by proxy at least one-third in nominal or par value amount of the issued Shares of the relevant Class (but so that if at any adjourned meeting of such holders a quorum as above defined is not Present, those Shareholders who are Present shall form a quorum) and that, subject to any rights or restrictions for the time being attached to the Shares of that Class, every Shareholder of the Class shall on a poll have one vote for each Share of the Class held by him. For the purposes of this Article the Directors may treat all the Classes or any two or more Classes as forming one Class if they consider that all such Classes would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate Classes.

 

8


18.

The rights conferred upon the holders of the Shares of any Class issued with preferred or other rights shall not, subject to any rights or restrictions for the time being attached to the Shares of that Class, be deemed to be materially adversely varied by, inter alia, the creation, allotment or issue of further Shares ranking pari passu with or subsequent to them or the redemption or purchase of any Shares of any Class by the Company. The rights of the holders of Shares shall not be deemed to be materially adversely varied by the creation or issue of Shares with preferred or other rights including, without limitation, the creation of Shares with enhanced or weighted voting rights.

CERTIFICATES

 

19.

Every Person whose name is entered as a Member in the Register may, without payment and upon its written request, request a certificate within two calendar months after allotment or lodgment of transfer (or within such other period as the conditions of issue shall provide) in the form determined by the Directors. All certificates shall specify the Share or Shares held by that Person, provided that in respect of a Share or Shares held jointly by several Persons the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a Share to one of several joint holders shall be sufficient delivery to all. All certificates for Shares shall be delivered personally or sent through the post addressed to the Member entitled thereto at the Member’s registered address as appearing in the Register.

 

20.

Every share certificate of the Company shall bear legends required under the applicable laws, including the Securities Act.

 

21.

Any two or more certificates representing Shares of any one Class held by any Member may at the Member’s request be cancelled and a single new certificate for such Shares issued in lieu on payment (if the Directors shall so require) of one dollar (US$1.00) or such smaller sum as the Directors shall determine.

 

22.

If a share certificate shall be damaged or defaced or alleged to have been lost, stolen or destroyed, a new certificate representing the same Shares may be issued to the relevant Member upon request, subject to delivery up of the old certificate or (if alleged to have been lost, stolen or destroyed) compliance with such conditions as to evidence and indemnity and the payment of out-of-pocket expenses of the Company in connection with the request as the Directors may think fit.

 

23.

In the event that Shares are held jointly by several Persons, any request may be made by any one of the joint holders and if so made shall be binding on all of the joint holders.

FRACTIONAL SHARES

 

24.

The Directors may issue fractions of a Share and, if so issued, a fraction of a Share shall be subject to and carry the corresponding fraction of liabilities (whether with respect to nominal or par value, premium, contributions, calls or otherwise), limitations, preferences, privileges, qualifications, restrictions, rights (including, without prejudice to the generality of the foregoing, voting and participation rights) and other attributes of a whole Share. If more than one fraction of a Share of the same Class is issued to or acquired by the same Shareholder such fractions shall be accumulated.

LIEN

 

25.

The Company has a first and paramount lien on every Share (whether or not fully paid) for all amounts (whether presently payable or not) payable at a fixed time or called in respect of that Share. The Company also has a first and paramount lien on every Share registered in the name of a Person indebted or under liability to the Company (whether he is the sole registered holder of a Share or one of two or more joint holders) for all amounts owing by him or his estate to the Company (whether or not presently payable). The Directors may at any time declare a Share to be wholly or in part exempt from the provisions of this Article. The Company’s lien on a Share extends to any amount payable in respect of it, including but not limited to dividends.

 

9


26.

The Company may sell, in such manner as the Directors in their absolute discretion think fit, any Share on which the Company has a lien, but no sale shall be made unless an amount in respect of which the lien exists is presently payable nor until the expiration of fourteen calendar days after a notice in writing, demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the Share, or the Persons entitled thereto by reason of his death or bankruptcy.

 

27.

For giving effect to any such sale the Directors may authorise a Person to transfer the Shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the Shares comprised in any such transfer and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.

 

28.

The proceeds of the sale after deduction of expenses, fees and commissions incurred by the Company shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue shall (subject to a like lien for sums not presently payable as existed upon the Shares prior to the sale) be paid to the Person entitled to the Shares immediately prior to the sale.

CALLS ON SHARES

 

29.

Subject to the terms of the allotment, the Directors may from time to time make calls upon the Shareholders in respect of any moneys unpaid on their Shares, and each Shareholder shall (subject to receiving at least fourteen calendar days’ notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on such Shares. A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed.

 

30.

The joint holders of a Share shall be jointly and severally liable to pay calls in respect thereof.

 

31.

If a sum called in respect of a Share is not paid before or on the day appointed for payment thereof, the Person from whom the sum is due shall pay interest upon the sum at the rate of eight per cent per annum from the day appointed for the payment thereof to the time of the actual payment, but the Directors shall be at liberty to waive payment of that interest wholly or in part.

 

32.

The provisions of these Articles as to the liability of joint holders and as to payment of interest shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the amount of the Share, or by way of premium, as if the same had become payable by virtue of a call duly made and notified.

 

33.

The Directors may make arrangements with respect to the issue of partly paid Shares for a difference between the Shareholders, or the particular Shares, in the amount of calls to be paid and in the times of payment.

 

34.

The Directors may, if they think fit, receive from any Shareholder willing to advance the same all or any part of the moneys uncalled and unpaid upon any partly paid Shares held by him, and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding without the sanction of an Ordinary Resolution, eight per cent per annum) as may be agreed upon between the Shareholder paying the sum in advance and the Directors. No such sum paid in advance of calls shall entitle the Member paying such sum to any portion of a dividend declared in respect of any period prior to the date upon which such sum would, but for such payment, become presently payable.

FORFEITURE OF SHARES

 

35.

If a Shareholder fails to pay any call or instalment of a call in respect of partly paid Shares on the day appointed for payment, the Directors may, at any time thereafter during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued.

 

10


36.

The notice shall name a further day (not earlier than the expiration of fourteen calendar days from the date of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed, the Shares in respect of which the call was made will be liable to be forfeited.

 

37.

If the requirements of any such notice as aforesaid are not complied with, any Share in respect of which the notice has been given may at any time thereafter, before the payment required by notice has been made, be forfeited by a resolution of the Directors to that effect.

 

38.

A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit.

 

39.

A Person whose Shares have been forfeited shall cease to be a Shareholder in respect of the forfeited Shares, but shall, notwithstanding, remain liable to pay to the Company all moneys which at the date of forfeiture were payable by him to the Company in respect of the Shares forfeited, but his liability shall cease if and when the Company receives payment in full of the amount unpaid on the Shares forfeited.

 

40.

A certificate in writing under the hand of a Director that a Share has been duly forfeited on a date stated in the certificate shall be conclusive evidence of the facts in the declaration as against all Persons claiming to be entitled to the Share.

 

41.

The Company may receive the consideration, if any, given for a Share on any sale or disposition thereof pursuant to the provisions of these Articles as to forfeiture and may execute a transfer of the Share in favour of the Person to whom the Share is sold or disposed of and that Person shall be registered as the holder of the Share and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the disposition or sale.

 

42.

The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which by the terms of issue of a Share becomes due and payable, whether on account of the amount of the Share, or by way of premium, as if the same had been payable by virtue of a call duly made and notified.

TRANSFER OF SHARES

 

43.

The instrument of transfer of any Share shall be in writing and in any usual or common form or such other form as the Directors may, in their absolute discretion, approve and be executed by or on behalf of the transferor and if in respect of a nil or partly paid up Share, or if so required by the Directors, shall also be executed on behalf of the transferee and shall be accompanied by the certificate (if any) of the Shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. The transferor shall be deemed to remain a Shareholder until the name of the transferee is entered in the Register in respect of the relevant Shares.

 

44.    (a)    The Directors may in their absolute discretion decline to register any transfer of Shares which is not fully paid up or on which the Company has a lien.

 

  (b)

The Directors may also decline to register any transfer of any Share unless:

 

  (i)

the instrument of transfer is lodged with the Company, accompanied by the certificate for the Shares to which it relates (if any) and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer;

 

  (ii)

the instrument of transfer is in respect of only one Class of Shares;

 

  (iii)

the instrument of transfer is properly stamped, if required;

 

11


  (iv)

in the case of a transfer to joint holders, the number of joint holders to whom the Share is to be transferred does not exceed four; and

 

  (v)

a fee of such maximum sum as the Designated Stock Exchange may determine to be payable, or such lesser sum as the Board of Directors may from time to time require, is paid to the Company in respect thereof.

 

45.

The registration of transfers may, on ten calendar days’ notice being given by advertisement in such one or more newspapers, by electronic means or by any other means in accordance with the Designated Stock Exchange Rules, be suspended and the Register closed at such times and for such periods as the Directors may, in their absolute discretion, from time to time determine, provided always that such registration of transfer shall not be suspended nor the Register closed for more than thirty calendar days in any calendar year.

 

46.

All instruments of transfer that are registered shall be retained by the Company. If the Directors refuse to register a transfer of any Shares, they shall within three calendar months after the date on which the transfer was lodged with the Company send notice of the refusal to each of the transferor and the transferee.

TRANSMISSION OF SHARES

 

47.

The legal personal representative of a deceased sole holder of a Share shall be the only Person recognised by the Company as having any title to the Share. In the case of a Share registered in the name of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor, shall be the only Person recognised by the Company as having any title to the Share.

 

48.

Any Person becoming entitled to a Share in consequence of the death or bankruptcy of a Shareholder shall, upon such evidence being produced as may from time to time be required by the Directors, have the right either to be registered as a Shareholder in respect of the Share or, instead of being registered himself, to make such transfer of the Share as the deceased or bankrupt Person could have made; but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the deceased or bankrupt Person before the death or bankruptcy.

 

49.

A Person becoming entitled to a Share by reason of the death or bankruptcy of a Shareholder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered Shareholder, except that he shall not, before being registered as a Shareholder in respect of the Share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company, provided however, that the Directors may at any time give notice requiring any such Person to elect either to be registered himself or to transfer the Share, and if the notice is not complied with within ninety calendar days, the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with.

REGISTRATION OF EMPOWERING INSTRUMENTS

 

50.

The Company shall be entitled to charge a fee not exceeding one U.S. dollar (US$1.00) on the registration of every probate, letters of administration, certificate of death or marriage, power of attorney, notice in lieu of distringas, or other instrument.

ALTERATION OF SHARE CAPITAL

 

51.

The Company may from time to time by Ordinary Resolution increase the share capital by such sum, to be divided into Shares of such Classes and amount, as the resolution shall prescribe.

 

52.

The Company may by Ordinary Resolution:

 

  (a)

increase its share capital by new Shares of such amount as it thinks expedient;

 

12


  (b)

consolidate and divide all or any of its share capital into Shares of a larger amount than its existing Shares;

 

  (c)

subdivide its Shares, or any of them, into Shares of an amount smaller than that fixed by the Memorandum, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced Share shall be the same as it was in case of the Share from which the reduced Share is derived; and

 

  (d)

cancel any Shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any Person and diminish the amount of its share capital by the amount of the Shares so cancelled.

 

53.

The Company may by Special Resolution reduce its share capital and any capital redemption reserve in any manner authorised by the Companies Act.

REDEMPTION, PURCHASE AND SURRENDER OF SHARES

 

54.

Subject to the provisions of the Companies Act and these Articles, the Company may:

 

  (a)

issue Shares that are to be redeemed or are liable to be redeemed at the option of the Shareholder or the Company. The redemption of Shares shall be effected in such manner and upon such terms as may be determined, before the issue of such Shares, by either the Board or by the Shareholders by Special Resolution;

 

  (b)

purchase its own Shares (including any redeemable Shares) on such terms and in such manner and terms as have been approved by the Board or by the Members by Ordinary Resolution, or are otherwise authorised by these Articles; and

 

  (c)

make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Companies Act, including out of capital.

 

55.

The purchase of any Share shall not oblige the Company to purchase any other Share other than as may be required pursuant to applicable law and any other contractual obligations of the Company.

 

56.

The holder of the Shares being purchased shall be bound to deliver up to the Company the certificate(s) (if any) thereof for cancellation and thereupon the Company shall pay to him the purchase or redemption monies or consideration in respect thereof.

 

57.

The Directors may accept the surrender for no consideration of any fully paid Share.

TREASURY SHARES

 

58.

The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share.

 

59.

The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, without limitation, for nil consideration).

GENERAL MEETINGS

 

60.

All general meetings other than annual general meetings shall be called extraordinary general meetings.

 

61.    (a)   

The Company may (but shall not be obliged to) in each calendar year hold a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at such time and place as may be determined by the Directors.

 

  (b)

At these meetings the report of the Directors (if any) shall be presented.

 

13


62.    (a)   

The Chairman or a majority of the Directors (acting by a resolution of the Board) may call general meetings, and they shall on a Shareholders’ requisition forthwith proceed to convene an extraordinary general meeting of the Company.

 

  (b)

A Shareholders’ requisition is a requisition of Members holding at the date of deposit of the requisition Shares which carry in aggregate not less than one-third (1/3) of all votes attaching to all issued and outstanding Shares of the Company that as at the date of the deposit carry the right to vote at general meetings of the Company.

 

  (c)

The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the Registered Office, and may consist of several documents in like form each signed by one or more requisitionists.

 

  (d)

If the Directors do not within twenty-one calendar days from the date of the deposit of the requisition duly proceed to convene a general meeting to be held within a further twenty-one calendar days, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three calendar months after the expiration of the said twenty-one calendar days.

 

  (e)

A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors.

NOTICE OF GENERAL MEETINGS

 

63.

At least ten (10) calendar days’ notice shall be given for any general meeting. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of these Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed:

 

  (a)

in the case of an annual general meeting, by all the Shareholders (or their proxies) entitled to attend and vote thereat; and

 

  (b)

in the case of an extraordinary general meeting, by Shareholders who together hold Shares which carry in aggregate at least a majority of all votes attaching to all Shares that carry the right to attend and vote thereat.

 

64.

The accidental omission to give notice of a meeting to or the non-receipt of a notice of a meeting by any Shareholder shall not invalidate the proceedings at any meeting.

PROCEEDINGS AT GENERAL MEETINGS

 

65.

No business except for the appointment of a chairman for the meeting shall be transacted at any general meeting unless a quorum of Shareholders is Present at the time when the meeting proceeds to business. One or more Shareholders holding Shares which carry in aggregate not less than one-third (1/3) of all votes attaching to all Shares which carry the right to attend and vote at such general meeting, Present at the meeting, shall be a quorum for all purposes.

 

66.

If within half an hour from the time appointed for the meeting a quorum is not Present, the meeting shall be dissolved.

 

67.

If the Directors wish to make this facility available for a specific general meeting or all general meetings of the Company, attendance and participation in any general meeting of the Company may be by means of Communication Facilities. Without limiting the generality of the foregoing, the Directors may determine that any general meeting may be held as a Virtual Meeting. The notice of any general meeting at which Communication Facilities will be utilized (including any Virtual Meeting) must disclose the Communication Facilities that will be used, including the procedures to be followed by any Shareholder or other participant of the meeting who wishes to utilise such Communication Facilities for the purposes of attending and participating in such meeting, including attending and casting any vote thereat

 

14


68.

The Chairman, if any, of the Board of Directors shall preside as chairman at every general meeting of the Company.

 

69.

If there is no such Chairman of the Board of Directors, or if at any general meeting he is not Present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman of the meeting, any Director or Person nominated by the Chairman (or, in the absence of such Chairman nomination, the Directors Present at the meeting) shall preside as chairman of that meeting, failing which the Shareholders Present shall choose any Person Present to be chairman of that meeting.

 

70.

The chairman of any general meeting (including any Virtual Meeting) shall be entitled to attend and participate at any such general meeting by means of Communication Facilities, and to act as the chairman of such general meeting, in which event the following provisions shall apply:

 

  (a)

The chairman of the meeting shall be deemed to be Present at the meeting; and

 

  (b)

If the Communication Facilities are interrupted or fail for any reason to enable the chairman of the meeting to hear and be heard by all other Persons participating in the meeting, then the other Directors Present at the meeting shall choose another Director Present to act as chairman of the meeting for the remainder of the meeting; provided that if no other Director is Present at the meeting, or if all the Directors Present decline to take the chair, then the meeting shall be automatically adjourned to the same day in the next week and at such time and place as shall be decided by the board of Directors.

 

71.

The chairman may with the consent of any general meeting at which a quorum is Present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting, or adjourned meeting, is adjourned for fourteen calendar days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

 

72.

The Directors may cancel or postpone any duly convened general meeting at any time prior to such meeting, except for general meetings requisitioned by the Shareholders in accordance with these Articles, for any reason or for no reason, upon notice in writing to Shareholders. A postponement may be for a stated period of any length or indefinitely as the Directors may determine.

 

73.

At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman of the meeting or any Shareholder Present and holding not less than ten per cent (10%) of the votes attaching to the Shares, and unless a poll is so demanded, a declaration by the chairman of the meeting that a resolution has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of, or against, that resolution.

 

74.

If a poll is duly demanded it shall be taken in such manner as the chairman of the meeting directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.

 

75.

All questions submitted to a meeting shall be decided by an Ordinary Resolution except where a greater majority is required by these Articles or by the Companies Act. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote.

 

15


76.

A poll demanded on the election of a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs.

VOTES OF SHAREHOLDERS

 

77.

Subject to any rights and restrictions for the time being attached to any Share, on a show of hands every Shareholder Present shall, at a general meeting of the Company, each have one vote and on a poll every Shareholder Present at the meeting shall have one (1) vote for each Class A Ordinary Share and ten (10) votes for each Class B Ordinary Share of which he is the holder.

 

78.

In the case of joint holders the vote of the senior who tenders a vote whether in person or by proxy (or, if a corporation or other non-natural person, by its duly authorised representative or proxy) shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the Register.

 

79.

Shares carrying the right to vote that are held by a Shareholder of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may be voted, whether on a show of hands or on a poll, by his committee, or other Person in the nature of a committee appointed by that court, and any such committee or other Person may vote in respect of such Shares by proxy.

 

80.

No Shareholder shall be entitled to vote at any general meeting of the Company unless all calls, if any, or other sums presently payable by him in respect of Shares carrying the right to vote held by him have been paid.

 

81.

On a poll votes may be given either personally or by proxy.

 

82.

Each Shareholder, other than a recognised clearing house (or its nominee(s)) or depositary (or its nominee(s)), may only appoint one proxy on a show of hand. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under Seal or under the hand of an officer or attorney duly authorised. A proxy need not be a Shareholder.

 

83.

An instrument appointing a proxy may be in any usual or common form or such other form as the Directors may approve.

 

84.

The instrument appointing a proxy shall be deposited at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company:

 

  (a)

not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or

 

  (b)

in the case of a poll taken more than 48 hours after it is demanded, be deposited as aforesaid after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll; or

 

  (c)

where the poll is not taken forthwith but is taken not more than 48 hours after it was demanded be delivered at the meeting at which the poll was demanded to the Chairman or to the secretary or to any Director;

provided that the Directors may in the notice convening the meeting, or in an instrument of proxy sent out by the Company, direct that the instrument appointing a proxy may be deposited at such other time (no later than the time for holding the meeting or adjourned meeting) at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company. The Chairman may in any event at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted shall be invalid.

 

16


85.

The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.

 

86.

A resolution in writing signed by all the Shareholders for the time being entitled to receive notice of and to attend and vote at general meetings of the Company (or being corporations by their duly authorised representatives) shall be as valid and effective as if the same had been passed at a general meeting of the Company duly convened and held.

CORPORATIONS ACTING BY REPRESENTATIVES AT MEETINGS

 

87.

Any corporation which is a Shareholder or a Director may by resolution of its directors or other governing body authorise such Person as it thinks fit to act as its representative at any meeting of the Company or of any meeting of holders of a Class or of the Directors or of a committee of Directors, and the Person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Shareholder or Director.

DEPOSITARY AND CLEARING HOUSES

 

88.

If a recognised clearing house (or its nominee(s)) or depositary (or its nominee(s)) is a Member of the Company it may, by resolution of its directors or other governing body or by power of attorney, authorise such Person(s) as it thinks fit to act as its representative(s) at any general meeting of the Company or of any Class of Shareholders provided that, if more than one Person is so authorised, the authorisation shall specify the number and Class of Shares in respect of which each such Person is so authorised. A Person so authorised pursuant to this Article shall be entitled to exercise the same powers on behalf of the recognised clearing house (or its nominee(s)) or depositary (or its nominee(s)) which he represents as that recognised clearing house (or its nominee(s)) or depositary (or its nominee(s)) could exercise if it were an individual Member holding the number and Class of Shares specified in such authorisation, including the right to vote individually on a show of hands.

DIRECTORS

 

89.

(a) Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than three (3) Directors, the exact number of Directors to be determined from time to time by the Board of Directors.

 

  (b)

The Board of Directors shall elect and appoint a Chairman by a majority of the Directors then in office. The period for which the Chairman will hold office will also be determined by a majority of all of the Directors then in office. The Chairman shall preside as chairman at every meeting of the Board of Directors. To the extent the Chairman is not present at a meeting of the Board of Directors within fifteen minutes after the time appointed for holding the same, the attending Directors may choose one of their number to be the chairman of the meeting.

 

  (c)

The Company may by Ordinary Resolution appoint any person to be a Director.

 

  (d)

The Board may, by the affirmative vote of a simple majority of the Directors present and voting at a Board meeting, appoint any person as a Director, to fill a casual vacancy on the Board or as an addition to the existing Board.

 

  (e)

An appointment of a Director may be on terms that the Director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between the Company and the Director, if any; but no such term shall be implied in the absence of express provision. Each Director whose term of office expires shall be eligible for re-election at a meeting of the Shareholders or re-appointment by the Board.

 

90.

A Director may be removed from office by Ordinary Resolution of the Company, notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under such agreement). A vacancy on the Board created by the removal of a Director under the previous clause may be filled by Ordinary Resolution or by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting.

 

17


  The notice of any meeting at which a resolution to remove a Director shall be proposed or voted upon must contain a statement of the intention to remove that Director and such notice must be served on that Director not less than ten (10) calendar days before the meeting. Such Director is entitled to attend the meeting and be heard on the motion for his removal.

 

91.

The Board may, from time to time, and except as required by applicable law or Designated Stock Exchange Rules, adopt, institute, amend, modify or revoke the corporate governance policies or initiatives of the Company and determine on various corporate governance related matters of the Company as the Board shall determine by resolution of Directors from time to time.

 

92.

A Director shall not be required to hold any Shares in the Company by way of qualification. A Director who is not a Member of the Company shall nevertheless be entitled to attend and speak at general meetings.

 

93.

The remuneration of the Directors may be determined by the Directors or by Ordinary Resolution.

 

94.

The Directors shall be entitled to be paid their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive such fixed allowance in respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other.

ALTERNATE DIRECTOR OR PROXY

 

95.

Any Director may in writing appoint another Person to be his alternate and, save to the extent provided otherwise in the form of appointment, such alternate shall have authority to sign written resolutions on behalf of the appointing Director, but shall not be required to sign such written resolutions where they have been signed by the appointing director, and to act in such Director’s place at any meeting of the Directors at which the appointing Director is unable to be present. Every such alternate shall be entitled to attend and vote at meetings of the Directors as a Director when the Director appointing him is not personally present and where he is a Director to have a separate vote on behalf of the Director he is representing in addition to his own vote. A Director may at any time in writing revoke the appointment of an alternate appointed by him. Such alternate shall be deemed for all purposes to be a Director and shall not be deemed to be the agent of the Director appointing him. The remuneration of such alternate shall be payable out of the remuneration of the Director appointing him and the proportion thereof shall be agreed between them.

 

96.

Any Director may appoint any Person, whether or not a Director, to be the proxy of that Director to attend and vote on his behalf, in accordance with instructions given by that Director, or in the absence of such instructions at the discretion of the proxy, at a meeting or meetings of the Directors which that Director is unable to attend personally. The instrument appointing the proxy shall be in writing under the hand of the appointing Director and shall be in any usual or common form or such other form as the Directors may approve, and must be lodged with the chairman of the meeting of the Directors at which such proxy is to be used, or first used, prior to the commencement of the meeting.

POWERS AND DUTIES OF DIRECTORS

 

97.

Subject to the Companies Act, these Articles and to any resolutions passed in a general meeting, the business of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all powers of the Company. No resolution passed by the Company in general meeting shall invalidate any prior act of the Directors that would have been valid if that resolution had not been passed.

 

98.

Subject to these Articles, the Directors may from time to time appoint any natural person or corporation, whether or not a Director to hold such office in the Company as the Directors may think necessary for the administration of the Company, including but not limited to, chief executive officer, one or more other executive officers, president, one or more vice presidents, treasurer, assistant treasurer, manager or controller, and for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another), and with such powers and duties as the Directors may think fit. Any natural person or corporation so appointed by the Directors may be

 

18


  removed by the Directors. The Directors may also appoint one or more of their number to the office of managing director upon like terms, but any such appointment shall ipso facto terminate if any managing director ceases for any cause to be a Director, or if the Company by Ordinary Resolution resolves that his tenure of office be terminated.

 

99.

The Directors may appoint any natural person or corporation to be a Secretary (and if need be an assistant Secretary or assistant Secretaries) who shall hold office for such term, at such remuneration and upon such conditions and with such powers as they think fit. Any Secretary or assistant Secretary so appointed by the Directors may be removed by the Directors or by the Company by Ordinary Resolution.

 

100.

The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors.

 

101.

The Directors may from time to time and at any time by power of attorney (whether under Seal or under hand) or otherwise appoint any company, firm or Person or body of Persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys or authorised signatory (any such Person being an “Attorney” or “Authorised Signatory”, respectively) of the Company for such purposes and with such powers, authorities and discretion (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of Persons dealing with any such Attorney or Authorised Signatory as the Directors may think fit, and may also authorise any such Attorney or Authorised Signatory to delegate all or any of the powers, authorities and discretion vested in him.

 

102.

The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the three next following Articles shall not limit the general powers conferred by this Article.

 

103.

The Directors from time to time and at any time may establish any committees, local boards or agencies for managing any of the affairs of the Company and may appoint any natural person or corporation to be a member of such committees or local boards and may appoint any managers or agents of the Company and may fix the remuneration of any such natural person or corporation.

 

104.

The Directors from time to time and at any time may delegate to any such committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorise the members for the time being of any such local board, or any of them to fill any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any natural person or corporation so appointed and may annul or vary any such delegation, but no Person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.

 

105.

Any such delegates as aforesaid may be authorised by the Directors to sub-delegate all or any of the powers, authorities, and discretion for the time being vested in them.

BORROWING POWERS OF DIRECTORS

 

106.

The Directors may from time to time at their discretion exercise all the powers of the Company to raise or borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof, to issue debentures, debenture stock, bonds and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

THE SEAL

 

107.

The Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of the Seal and if given after may be in general form confirming a number of affixing of the Seal. The Seal shall be affixed in the presence of a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose and every Person as aforesaid shall sign every instrument to which the Seal is so affixed in their presence.

 

19


108.

The Company may maintain a facsimile of the Seal in such countries or places as the Directors may appoint and such facsimile Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of such facsimile Seal and if given after may be in general form confirming a number of affixing of such facsimile Seal. The facsimile Seal shall be affixed in the presence of such Person or Persons as the Directors shall for this purpose appoint and such Person or Persons as aforesaid shall sign every instrument to which the facsimile Seal is so affixed in their presence and such affixing of the facsimile Seal and signing as aforesaid shall have the same meaning and effect as if the Seal had been affixed in the presence of and the instrument signed by a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose.

 

109.

Notwithstanding the foregoing, a Secretary or any assistant Secretary shall have the authority to affix the Seal, or the facsimile Seal, to any instrument for the purposes of attesting authenticity of the matter contained therein but which does not create any obligation binding on the Company.

DISQUALIFICATION OF DIRECTORS

 

110.

The office of Director shall be vacated, if the Director:

 

  (a)

becomes bankrupt or makes any arrangement or composition with his creditors;

 

  (b)

dies or is found to be or becomes of unsound mind;

 

  (c)

resigns his office by notice in writing to the Company;

 

  (d)

without special leave of absence from the Board, is absent from meetings of the Board for three consecutive meetings and the Board resolves that his office be vacated; or

 

  (e)

is removed from office pursuant to any other provision of these Articles.

PROCEEDINGS OF DIRECTORS

 

111.

The Directors may meet together (either within or outside the Cayman Islands) for the despatch of business, adjourn, and otherwise regulate their meetings and proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. At any meeting of the Directors, each Director present in person or represented by his proxy or alternate shall be entitled to one vote. In case of an equality of votes the Chairman shall have a second or casting vote. A Director may, and a Secretary or assistant Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors.

 

112.

A Director may participate in any meeting of the Directors, or of any committee appointed by the Directors of which such Director is a member, by means of telephone or similar communication equipment by way of which all Persons participating in such meeting can communicate with each other and such participation shall be deemed to constitute presence in person at the meeting.

 

113.

The quorum necessary for the transaction of the business of the Board may be fixed by the Directors, and unless so fixed, the quorum shall be a majority of Directors then in office. A Director represented by proxy or by an alternate Director at any meeting shall be deemed to be present for the purposes of determining whether or not a quorum is present.

 

114.

A Director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction with the Company shall declare the nature of his interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract or transaction which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made or transaction so consummated. Subject to the

 

20


  Designated Stock Exchange Rules and disqualification by the chairman of the relevant Board meeting, a Director may vote in respect of any contract or transaction or proposed contract or transaction notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the Directors at which any such contract or transaction or proposed contract or transaction shall come before the meeting for consideration.

 

115.

A Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relation thereby established. A Director, notwithstanding his interest, may be counted in the quorum present at any meeting of the Directors whereat he or any other Director is appointed to hold any such office or place of profit under the Company or whereat the terms of any such appointment are arranged and he may vote on any such appointment or arrangement.

 

116.

Any Director may act by himself or through his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional services as if he were not a Director; provided that nothing herein contained shall authorise a Director or his firm to act as auditor to the Company.

 

117.

The Directors shall cause minutes to be made for the purpose of recording:

 

  (a)

all appointments of officers made by the Directors;

 

  (b)

the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and

 

  (c)

all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of Directors.

 

118.

When the chairman of a meeting of the Directors signs the minutes of such meeting the same shall be deemed to have been duly held notwithstanding that all the Directors have not actually come together or that there may have been a technical defect in the proceedings.

 

119.

A resolution in writing signed by all the Directors or all the members of a committee of Directors entitled to receive notice of a meeting of Directors or committee of Directors, as the case may be (an alternate Director, subject as provided otherwise in the terms of appointment of the alternate Director, being entitled to sign such a resolution on behalf of his appointer), shall be as valid and effectual as if it had been passed at a duly called and constituted meeting of Directors or committee of Directors, as the case may be. When signed a resolution may consist of several documents each signed by one or more of the Directors or his duly appointed alternate.

 

120.

The continuing Directors may act notwithstanding any vacancy in their body but if and for so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors may act for the purpose of increasing the number, or of summoning a general meeting of the Company, but for no other purpose.

 

121.

Subject to any regulations imposed on it by the Directors, a committee appointed by the Directors may elect a chairman of its meetings. If no such chairman is elected, or if at any meeting the chairman is not present within fifteen minutes after the time appointed for holding the meeting, the committee members present may choose one of their number to be chairman of the meeting.

 

21


122.

A committee appointed by the Directors may meet and adjourn as it thinks proper. Subject to any regulations imposed on it by the Directors, questions arising at any meeting shall be determined by a majority of votes of the committee members present and in case of an equality of votes the chairman shall have a second or casting vote.

 

123.

All acts done by any meeting of the Directors or of a committee of Directors, or by any Person acting as a Director, shall notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or Person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such Person had been duly appointed and was qualified to be a Director.

PRESUMPTION OF ASSENT

 

124.

A Director who is present at a meeting of the Board of Directors at which an action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favour of such action.

DIVIDENDS

 

125.

Subject to any rights and restrictions for the time being attached to any Shares, the Directors may from time to time declare dividends (including interim dividends) and other distributions on Shares in issue and authorise payment of the same out of the funds of the Company lawfully available therefor.

 

126.

Subject to any rights and restrictions for the time being attached to any Shares, the Company by Ordinary Resolution may declare dividends, but no dividend shall exceed the amount recommended by the Directors.

 

127.

The Directors may, before recommending or declaring any dividend, set aside out of the funds legally available for distribution such sums as they think proper as a reserve or reserves which shall, in the absolute discretion of the Directors, be applicable for meeting contingencies or for equalising dividends or for any other purpose to which those funds may be properly applied, and pending such application may in the absolute discretion of the Directors, either be employed in the business of the Company or be invested in such investments (other than Shares of the Company) as the Directors may from time to time think fit.

 

128.

Any dividend payable in cash to the holder of Shares may be paid in any manner determined by the Directors. If paid by cheque it will be sent by mail addressed to the holder at his address in the Register, or addressed to such person and at such addresses as the holder may direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the Register in respect of such Shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company.

 

129.

The Directors may determine that a dividend shall be paid wholly or partly by the distribution of specific assets (which may consist of the shares or securities of any other company) and may settle all questions concerning such distribution. Without limiting the generality of the foregoing, the Directors may fix the value of such specific assets, may determine that cash payment shall be made to some Shareholders in lieu of specific assets and may vest any such specific assets in trustees on such terms as the Directors think fit.

 

130.

Subject to any rights and restrictions for the time being attached to any Shares, all dividends shall be declared and paid according to the amounts paid up on the Shares, but if and for so long as nothing is paid up on any of the Shares dividends may be declared and paid according to the par value of the Shares. No amount paid on a Share in advance of calls shall, while carrying interest, be treated for the purposes of this Article as paid on the Share.

 

131.

If several Persons are registered as joint holders of any Share, any of them may give effective receipts for any dividend or other moneys payable on or in respect of the Share.

 

22


132.

No dividend shall bear interest against the Company.

 

133.

Any dividend unclaimed after a period of six calendar years from the date of declaration of such dividend may be forfeited by the Board of Directors and, if so forfeited, shall revert to the Company.

ACCOUNTS, AUDIT AND ANNUAL RETURN AND DECLARATION

 

134.

The books of account relating to the Company’s affairs shall be kept in such manner as may be determined from time to time by the Directors.

 

135.

The books of account shall be kept at the Registered Office, or at such other place or places as the Directors think fit, and shall always be open to the inspection of the Directors.

 

136.

The Directors may from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Shareholders not being Directors, and no Shareholder (not being a Director) shall have any right to inspect any account or book or document of the Company except as conferred by law or authorised by the Directors or by Ordinary Resolution.

 

137.

The accounts relating to the Company’s affairs shall be audited in such manner and with such financial year end as may be determined from time to time by the Directors or failing any determination as aforesaid shall not be audited.

 

138.

The Directors may appoint an auditor of the Company who shall hold office until removed from office by a resolution of the Directors and may fix his or their remuneration.

 

139.

Every auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of the duties of the auditors.

 

140.

The auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment, and at any time during their term of office, upon request of the Directors or any general meeting of the Members.

 

141.

The Directors in each calendar year shall prepare, or cause to be prepared, an annual return and declaration setting forth the particulars required by the Companies Act and deliver a copy thereof to the Registrar of Companies in the Cayman Islands.

CAPITALISATION OF RESERVES

 

142.

Subject to the Companies Act, the Directors may:

 

  (a)

resolve to capitalise an amount standing to the credit of reserves (including a Share Premium Account, capital redemption reserve and profit and loss account), which is available for distribution;

 

  (b)

appropriate the sum resolved to be capitalised to the Shareholders in proportion to the nominal amount of Shares (whether or not fully paid) held by them respectively and apply that sum on their behalf in or towards:

 

  (i)

paying up the amounts (if any) for the time being unpaid on Shares held by them respectively, or

 

  (ii)

paying up in full unissued Shares or debentures of a nominal amount equal to that sum,

and allot the Shares or debentures, credited as fully paid, to the Shareholders (or as they may direct) in those proportions, or partly in one way and partly in the other, but the Share Premium Account, the capital redemption reserve and profits which are not available for distribution may, for the purposes of this Article, only be applied in paying up unissued Shares to be allotted to Shareholders credited as fully paid;

 

23


  (c)

make any arrangements they think fit to resolve a difficulty arising in the distribution of a capitalised reserve and in particular, without limitation, where Shares or debentures become distributable in fractions the Directors may deal with the fractions as they think fit;

 

  (d)

authorise a Person to enter (on behalf of all the Shareholders concerned) into an agreement with the Company providing for either:

 

  (i)

the allotment to the Shareholders respectively, credited as fully paid, of Shares or debentures to which they may be entitled on the capitalisation, or

 

  (ii)

the payment by the Company on behalf of the Shareholders (by the application of their respective proportions of the reserves resolved to be capitalised) of the amounts or part of the amounts remaining unpaid on their existing Shares,

and any such agreement made under this authority being effective and binding on all those Shareholders; and

 

  (e)

generally do all acts and things required to give effect to the resolution.

 

143.

Notwithstanding any provisions in these Articles, the Directors may resolve to capitalise an amount standing to the credit of reserves (including the share premium account, capital redemption reserve and profit and loss account) or otherwise available for distribution by applying such sum in paying up in full unissued Shares to be allotted and issued to:

 

  (a)

employees (including Directors) or service providers of the Company or its Affiliates upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or the Members;

 

  (b)

any trustee of any trust or administrator of any share incentive scheme or employee benefit scheme to whom shares are to be allotted and issued by the Company in connection with the operation of any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or Members; or

 

  (c)

any depositary of the Company for the purposes of the issue, allotment and delivery by the depositary of ADSs to employees (including Directors) or service providers of the Company or its Affiliates upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or the Members.

SHARE PREMIUM ACCOUNT

 

144.

The Directors shall in accordance with the Companies Act establish a Share Premium Account and shall carry to the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any Share.

 

145.

There shall be debited to any Share Premium Account on the redemption or purchase of a Share the difference between the nominal value of such Share and the redemption or purchase price provided always that at the discretion of the Directors such sum may be paid out of the profits of the Company or, if permitted by the Companies Act, out of capital.

 

24


NOTICES

 

146.

Except as otherwise provided in these Articles, any notice or document may be served by the Company or by the Person entitled to give notice to any Shareholder either personally, or by posting it by airmail or a recognised courier service in a prepaid letter addressed to such Shareholder at his address as appearing in the Register, or by electronic mail to any electronic mail address such Shareholder may have specified in writing for the purpose of such service of notices, or by facsimile to any facsimile number such Shareholder may have specified in writing for the purpose of such service of notices, or by placing it on the Company’s Website should the Directors deem it appropriate. In the case of joint holders of a Share, all notices shall be given to that one of the joint holders whose name stands first in the Register in respect of the joint holding, and notice so given shall be sufficient notice to all the joint holders.

 

147.

Notices sent from one country to another shall be sent or forwarded by prepaid airmail or a recognised courier service.

 

148.

Any Shareholder Present at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting and, where requisite, of the purposes for which such meeting was convened.

 

149.

Any notice or other document, if served by:

 

  (a)

post, shall be deemed to have been served five calendar days after the time when the letter containing the same is posted;

 

  (b)

facsimile, shall be deemed to have been served upon production by the transmitting facsimile machine of a report confirming transmission of the facsimile in full to the facsimile number of the recipient;

 

  (c)

recognised courier service, shall be deemed to have been served 48 hours after the time when the letter containing the same is delivered to the courier service; or

 

  (d)

electronic means, shall be deemed to have been served immediately (i) upon the time of the transmission to the electronic mail address supplied by the Shareholder to the Company or (ii) upon the time of its placement on the Company’s Website.

In proving service by post or courier service it shall be sufficient to prove that the letter containing the notice or documents was properly addressed and duly posted or delivered to the courier service.

 

150.

Any notice or document delivered or sent by post to or left at the registered address of any Shareholder in accordance with the terms of these Articles shall notwithstanding that such Shareholder be then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to have been duly served in respect of any Share registered in the name of such Shareholder as sole or joint holder, unless his name shall at the time of the service of the notice or document have been removed from the Register as the holder of the Share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all Persons interested (whether jointly with or as claiming through or under him) in the Share.

 

151.

Notice of every general meeting of the Company shall be given to:

 

  (a)

all Shareholders holding Shares with the right to receive notice and who have supplied to the Company an address for the giving of notices to them; and

 

  (b)

every Person entitled to a Share in consequence of the death or bankruptcy of a Shareholder, who but for his death or bankruptcy would be entitled to receive notice of the meeting.

No other Person shall be entitled to receive notices of general meetings.

INFORMATION

 

152.

Subject to the relevant laws, rules and regulations applicable to the Company, no Member shall be entitled to require discovery of any information in respect of any detail of the Company’s trading or any information which is or may be in the nature of a trade secret or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Board would not be in the interests of the Members of the Company to communicate to the public.

 

25


153.

Subject to due compliance with the relevant laws, rules and regulations applicable to the Company, the Board shall be entitled to release or disclose any information in its possession, custody or control regarding the Company or its affairs to any of its Members including, without limitation, information contained in the Register and transfer books of the Company.

INDEMNITY

 

154.

Every Director (including for the purposes of this Article any alternate Director appointed pursuant to the provisions of these Articles), Secretary, assistant Secretary, or other officer for the time being and from time to time of the Company (but not including the Company’s auditors) and the personal representatives of the same (each an “Indemnified Person”) shall be indemnified and secured harmless against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such Indemnified Person, other than by reason of such Indemnified Person’s own dishonesty, wilful default or fraud, in or about the conduct of the Company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such Indemnified Person in defending (whether successfully or otherwise) any civil proceedings concerning the Company or its affairs in any court whether in the Cayman Islands or elsewhere.

 

155.

No Indemnified Person shall be liable:

 

  (a)

for the acts, receipts, neglects, defaults or omissions of any other Director or officer or agent of the Company; or

 

  (b)

for any loss on account of defect of title to any property of the Company; or

 

  (c)

on account of the insufficiency of any security in or upon which any money of the Company shall be invested; or

 

  (d)

for any loss incurred through any bank, broker or other similar Person; or

 

  (e)

for any loss occasioned by any negligence, default, breach of duty, breach of trust, error of judgement or oversight on such Indemnified Person’s part; or

 

  (f)

for any loss, damage or misfortune whatsoever which may happen in or arise from the execution or discharge of the duties, powers, authorities, or discretions of such Indemnified Person’s office or in relation thereto;

unless the same shall happen through such Indemnified Person’s own dishonesty, wilful default or fraud.

FINANCIAL YEAR

 

156.

Unless the Directors otherwise prescribe, the financial year of the Company shall end on December 31st in each calendar year and shall begin on January 1st in each calendar year.

NON-RECOGNITION OF TRUSTS

 

157.

No Person shall be recognised by the Company as holding any Share upon any trust and the Company shall not, unless required by law, be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any Share or (except only as otherwise provided by these Articles or as the Companies Act requires) any other right in respect of any Share except an absolute right to the entirety thereof in each Shareholder registered in the Register.

 

26


WINDING UP

 

158.

If the Company shall be wound up the liquidator may, with the sanction of a Special Resolution of the Company and any other sanction required by the Companies Act, divide amongst the Members in species or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability.

 

159.

If the Company shall be wound up, and the assets available for distribution amongst the Members shall be insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the par value of the Shares held by them. If in a winding up the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. This Article is without prejudice to the rights of the holders of Shares issued upon special terms and conditions.

AMENDMENT OF ARTICLES OF ASSOCIATION

 

160.

Subject to the Companies Act, the Company may at any time and from time to time by Special Resolution alter or amend these Articles in whole or in part.

CLOSING OF REGISTER OR FIXING RECORD DATE

 

161.

For the purpose of determining those Shareholders that are entitled to receive notice of, attend or vote at any meeting of Shareholders or any adjournment thereof, or those Shareholders that are entitled to receive payment of any dividend, or in order to make a determination as to who is a Shareholder for any other purpose, the Directors may provide that the Register shall be closed for transfers for a stated period which shall not exceed in any case thirty calendar days in any calendar year.

 

162.

In lieu of or apart from closing the Register, the Directors may fix in advance a date as the record date for any such determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of the Shareholders and for the purpose of determining those Shareholders that are entitled to receive payment of any dividend the Directors may, at or within ninety calendar days prior to the date of declaration of such dividend, fix a subsequent date as the record date for such determination.

 

163.

If the Register is not so closed and no record date is fixed for the determination of those Shareholders entitled to receive notice of, attend or vote at a meeting of Shareholders or those Shareholders that are entitled to receive payment of a dividend, the date on which notice of the meeting is posted or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Shareholders. When a determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of Shareholders has been made as provided in this Article, such determination shall apply to any adjournment thereof.

REGISTRATION BY WAY OF CONTINUATION

 

164.

The Company may by Special Resolution resolve to be registered by way of continuation in a jurisdiction outside the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing. In furtherance of a resolution adopted pursuant to this Article, the Directors may cause an application to be made to the Registrar of Companies to deregister the Company in the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing and may cause all such further steps as they consider appropriate to be taken to effect the transfer by way of continuation of the Company.

 

27


DISCLOSURE

 

165.

The Directors, or any service providers (including the officers, the Secretary and the registered office provider of the Company) specifically authorised by the Directors, shall be entitled to disclose to any regulatory or judicial authority or to any stock exchange on which securities of the Company may from time to time be listed any information regarding the affairs of the Company including without limitation information contained in the Register and books of the Company.

EXCLUSIVE JURISDICTION

 

166.

Unless the Company consents in writing to the selection of an alternative forum, the U.S. District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) shall be the exclusive forum within the United States for the resolution of any complaint asserting a cause of action arising under the Securities Act and the Securities Exchange Act. Any person or entity purchasing or otherwise acquiring any Share, ADS or other securities in the Company shall be deemed to have notice of an consented to the provisions of this Article.

 

28


EX-4.3

Exhibit 4.3

 

LOGO


LOGO

 

TABLE OF CONTENTS

 

         Page  

PARTIES

     1  

RECITALS

     1  

Section 1.

  Certain Definitions      1  

(a)

  ADR Register      1  

(b)

  ADRs; Direct Registration ADRs      1  

(c)

  ADS      1  

(d)

  Beneficial Owner      1  

(e)

  Custodian      2  

(f)

  Deliver, execute, issue et al      2  

(g)

  Delivery Order      2  

(h)

  Deposited Securities      2  

(i)

  Direct Registration System      2  

(j)

  Holder      2  

(k)

  Securities Act of 1933      2  

(l)

  Securities Exchange Act of 1934      3  

(m)

  Shares      3  

(n)

  Transfer Office      3  

(o)

  Withdrawal Order      3  

Section 2.

  Form of ADRs      3  

Section 3.

  Deposit of Shares      4  

Section 4.

  Issue of ADRs      5  

Section 5.

  Distributions on Deposited Securities      5  

Section 6.

  Withdrawal of Deposited Securities      5  

Section 7.

  Substitution of ADRs      6  

Section 8.

  Cancellation and Destruction of ADRs; Maintenance of Records      6  

Section 9.

  The Custodian      6  

Section 10.

  Lists of Holders      7  

Section 11.

  Depositary’s Agents      7  

Section 12.

  Resignation and Removal of the Depositary; Appointment of Successor Depositary      7  

Section 13.

  Reports      8  

Section 14.

  Additional Shares      8  

Section 15.

  Indemnification      9  

Section 16.

  Notices      10  

Section 17.

  Counterparts      11  

Section 18.

  No Third Party Beneficiaries; Holders and Beneficial Owners as Parties; Binding Effect      11  

Section 19.

  Severability      11  

Section 20.

  Governing Law; Consent to Jurisdiction      11  

Section 21.

  Agent for Service      14  

Section 22.

  Waiver of Immunities      15  

Section 23.

  Waiver of Jury Trial      16  

TESTIMONIUM

     17  

SIGNATURES

     17  

 

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     Page  
EXHIBIT A   

FORM OF FACE OF ADR

     A-1  

Introductory Paragraph

     A-1  

(1)   Issuance of ADSs

     A-2  

(2)   Withdrawal of Deposited Securities

     A-3  

(3)   Transfers, Split-Ups and Combinations of ADRs

     A-4  

(4)   Certain Limitations to Registration, Transfer etc.

     A-4  

(5)   Liability for Taxes, Duties and Other Charges

     A-5  

(6)   Disclosure of Interests

     A-6  

(7)   Charges of Depositary

     A-7  

(8)   Available Information

     A-10  

(9)   Execution

     A-10  

Signature of Depositary

     A-11  

Address of Depositary’s Office

     A-11  

FORM OF REVERSE OF ADR

     A-12  

(10)  Distributions on Deposited Securities

     A-12  
(11)  Record Dates    A-13  
(12)  Voting of Deposited Securities    A-14  

(13)  Changes Affecting Deposited Securities

     A-16  
(14)  Exoneration    A-17  

(15)  Resignation and Removal of Depositary; the Custodian

     A-21  

(16)  Amendment

     A-21  

(17)  Termination

     A-22  

(18)  Appointment; Acknowledgements and Agreements

     A-24  
(19)  Waiver    A-24  
(20)  Jurisdiction    A-25  

 

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DEPOSIT AGREEMENT dated as of ______________, 2021 (the “Deposit Agreement”) among TDCX Inc. and its successors (the “Company”), JPMORGAN CHASE BANK, N.A., as depositary hereunder (the “Depositary”), and all Holders (defined below) and Beneficial Owners (defined below) from time to time of American Depositary Receipts issued hereunder (“ADRs”) evidencing American Depositary Shares (“ADSs”) representing deposited Shares (defined below). The Company hereby appoints the Depositary as depositary for the Deposited Securities (defined below) and hereby authorizes and directs the Depositary to act in accordance with the terms set forth in this Deposit Agreement. All capitalized terms used herein have the meanings ascribed to them in Section 1 or elsewhere in this Deposit Agreement. The parties hereto agree as follows:

1. Certain Definitions.

(a) “ADR Register” is defined in paragraph (3) of the form of ADR (Transfers, Split-Ups and Combinations of ADRs) in Exhibit A hereto.

(b) “ADRs” mean the American Depositary Receipts executed and delivered hereunder. ADRs may be either in physical certificated form or Direct Registration ADRs (as hereinafter defined). ADRs in physical certificated form, and the terms and conditions governing the Direct Registration ADRs, shall be substantially in the form of Exhibit A annexed hereto (as the same may be amended from time to time, the “form of ADR”). The term “Direct Registration ADR” means an ADR, the ownership of which is recorded on the Direct Registration System. References to “ADRs” shall include certificated ADRs and Direct Registration ADRs, unless the context otherwise requires. The form of ADR attached hereto as Exhibit A (as amended from time to time) is hereby incorporated herein and made a part hereof; the provisions of the form of ADR shall be binding upon the parties hereto.

(c) Subject to paragraph (13) of the form of ADR, (Changes Affecting Deposited Securities) each “ADS” evidenced by an ADR represents the right to receive, and to exercise the beneficial ownership interests in, the number or percentage of Shares specified in the form of ADR attached hereto as Exhibit A (as amended from time to time) that are on deposit with the Depositary and/or the Custodian and a pro rata share in any other Deposited Securities, subject, in each case, to the terms of this Deposit Agreement and the ADSs. The ADS(s)-to-Share(s) ratio is subject to amendment as provided in the form of ADR (which may give rise to fees contemplated in paragraph (7) thereof (Charges of Depositary)).

(d) “Beneficial Owner” means as to any ADS, any person or entity having a beneficial ownership interest in such ADS. A Beneficial Owner need not be the Holder of the ADR evidencing such ADS. If a Beneficial Owner of ADSs is not a Holder, it must rely on the Holder of the ADR(s) evidencing such ADSs in order to assert any rights or receive any benefits under this Deposit Agreement. The arrangements between a Beneficial Owner of ADSs and the Holder of the corresponding ADRs may affect the Beneficial Owner’s ability to exercise any rights it may have.

 

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(e) “Custodian” means the agent or agents of the Depositary (singly or collectively, as the context requires) and any additional or substitute Custodian appointed pursuant to Section 9.

(f) The terms “deliver”, “execute”, “issue”, “register”, “surrender”, “transfer” or “cancel”, when used with respect to Direct Registration ADRs, shall refer to an entry or entries or an electronic transfer or transfers in the Direct Registration System, and, when used with respect to ADRs in physical certificated form, shall refer to the physical delivery, execution, issuance, registration, surrender, transfer or cancellation of certificates representing the ADRs.

(g) “Delivery Order” is defined in Section 3(a)(i).

(h) “Deposited Securities” as of any time means all Shares at such time deposited under this Deposit Agreement and any and all other Shares, securities, property and cash at such time held by the Depositary or the Custodian in respect or in lieu of such deposited Shares and other Shares, securities, property and cash. Deposited Securities are not intended to, and shall not, constitute proprietary assets of the Depositary, the Custodian or their nominees. Beneficial ownership in Deposited Securities is intended to be, and shall at all times during the term of the Deposit Agreement continue to be, vested in the Beneficial Owners of the ADSs representing such Deposited Securities.

(i) “Direct Registration System” means the system for the uncertificated registration of ownership of securities established by The Depository Trust Company (“DTC”) and utilized by the Depositary pursuant to which the Depositary may record the ownership of ADRs without the issuance of a certificate, which ownership shall be evidenced by periodic statements issued by the Depositary to the Holders entitled thereto. For purposes hereof, the Direct Registration System shall include access to the Profile Modification System maintained by DTC which provides for automated transfer of ownership between DTC and the Depositary.

(j) “Holder” means the person or persons in whose name an ADR is registered on the ADR Register. For all purposes under the Deposit Agreement and the ADRs, a Holder shall be deemed to have all requisite authority to act on behalf of any and all Beneficial Owners of the ADSs evidenced by the ADR(s) registered in such Holder’s name.

(k) “Securities Act of 1933” means the United States Securities Act of 1933, as from time to time amended.

 

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(l) “Securities Exchange Act of 1934” means the United States Securities Exchange Act of 1934, as from time to time amended.

(m) “Shares” mean the Class A ordinary shares of the Company, and shall include the rights to receive Shares specified in paragraph (1) of the form of ADR (Issuance of ADSs).

(n) “Transfer Office” is defined in paragraph (3) of the form of ADR (Transfers, Split-Ups and Combinations of ADRs).

(o) “Withdrawal Order” is defined in Section 6.

2. Form of ADRs.

(a) Direct Registration ADRs. Notwithstanding anything in this Deposit Agreement or in the form of ADR to the contrary, ADSs shall be evidenced by Direct Registration ADRs, unless certificated ADRs are specifically requested by the Holder.

(b) Certificated ADRs. ADRs in certificated form shall be printed or otherwise reproduced at the discretion of the Depositary in accordance with its customary practices in its American depositary receipt business, or at the request of the Company typewritten and photocopied on plain or safety paper, and shall be substantially in the form set forth in the form of ADR, with such changes as may be required by the Depositary or the Company to comply with their obligations hereunder, any applicable law, regulation or usage or to indicate any special limitations or restrictions to which any particular ADRs are subject. ADRs may be issued in denominations of any number of ADSs. ADRs in certificated form shall be executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary. ADRs in certificated form bearing the facsimile signature of anyone who was at the time of execution a duly authorized officer of the Depositary shall bind the Depositary, notwithstanding that such officer has ceased to hold such office prior to the delivery of such ADRs.

(c) Binding Effect. Holders of ADRs, and the Beneficial Owners of the ADSs evidenced by such ADRs, shall each be bound by the terms and conditions of this Deposit Agreement and of the form of ADR, regardless of whether such ADRs are Direct Registration ADRs or certificated ADRs.

 

 

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3. Deposit of Shares.

(a) Requirements. In connection with the deposit of Shares hereunder, the Depositary or the Custodian may require the following in a form satisfactory to it:

(i) a written order from the Company directing the Depositary to issue to, or upon the written order of, the person or persons designated in such order a Direct Registration ADR or ADRs evidencing the number of ADSs representing such deposited Shares (a “Delivery Order”);

(ii) proper endorsements or duly executed instruments of transfer in respect of such deposited Shares;

(iii) instruments assigning to the Depositary, the Custodian or a nominee of either any distribution on or in respect of such deposited Shares or indemnity therefor; and

(iv) proxies entitling the Custodian to vote such deposited Shares.

(b) Registration of Deposited Securities. As soon as practicable after the Custodian receives Deposited Securities pursuant to any such deposit or pursuant to paragraph (10) (Distributions on Deposited Securities) or (13) (Changes Affecting Deposited Securities) of the form of ADR, the Custodian shall present such Deposited Securities for registration of transfer into the name of the Depositary or the Custodian or a nominee of either, in each case for the benefit of Holders, to the extent such registration is practicable, at the cost and expense of the person making such deposit (or for whose benefit such deposit is made) and shall obtain evidence satisfactory to it of such registration. Deposited Securities shall be held by the Custodian for the account and to the order of the Depositary for the benefit of Holders of ADRs (to the extent not prohibited by law) at such place or places and in such manner as the Depositary shall determine. Notwithstanding anything else contained herein, in the form of ADR and/or in any outstanding ADSs, the Depositary, the Custodian and their respective nominees are intended to be, and shall at all times during the term of the Deposit Agreement be, the record holder(s) only of the Deposited Securities represented by the ADSs for the benefit of the Holders. The Depositary, on its own behalf and on behalf of the Custodian and their respective nominees, disclaims any beneficial ownership interest in the Deposited Securities held on behalf of the Holders.

(c) Delivery of Deposited Securities. Deposited Securities may be delivered by the Custodian to any person only under the circumstances expressly contemplated in this Deposit Agreement. To the extent that the provisions of or governing the Shares make delivery of certificates therefor impracticable, Shares may be deposited hereunder by such delivery thereof as the Depositary or the Custodian may reasonably accept, including, without limitation, by causing them to be credited to an account maintained by the Custodian for such purpose with the Company or an accredited intermediary, such as a bank, acting as a registrar for the Shares, together with delivery of the documents, payments and Delivery Order referred to herein to the Custodian or the Depositary.

 

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4. Issue of ADRs. After any such deposit of Shares, the Custodian shall notify the Depositary of such deposit and of the information contained in any related Delivery Order by letter, first class airmail postage prepaid, or, at the request, risk and expense of the person making the deposit, by SWIFT, cable, telex or facsimile transmission. After receiving such notice from the Custodian, the Depositary, subject to this Deposit Agreement, shall properly issue at the Transfer Office, to or upon the order of any person named in such notice, an ADR or ADRs registered as requested and evidencing the aggregate ADSs to which such person is entitled.

5. Distributions on Deposited Securities. To the extent that the Depositary determines in its discretion that any distribution pursuant to paragraph (10) of the form of ADR (Distributions on Deposited Securities) is not practicable with respect to any Holder, the Depositary may make such distribution as it so deems practicable, including the distribution of foreign currency, securities or property (or appropriate documents evidencing the right to receive foreign currency, securities or property) or the retention thereof as Deposited Securities with respect to such Holder’s ADRs (without liability for interest thereon or the investment thereof).

6. Withdrawal of Deposited Securities. In connection with any surrender of an ADR for withdrawal of the Deposited Securities represented by the ADSs evidenced thereby, the Depositary may require proper endorsement in blank of such ADR (or duly executed instruments of transfer thereof in blank) and the Holder’s written order directing the Depositary to cause the Deposited Securities represented by the ADSs evidenced by such ADR to be withdrawn and delivered to, or upon the written order of, any person designated in such order (a “Withdrawal Order”). Directions from the Depositary to the Custodian to deliver Deposited Securities shall be given by letter, first class airmail postage prepaid, or, at the request, risk and expense of the Holder, by SWIFT or email transmission. Delivery of Deposited Securities may be made by the delivery of certificates (which, if required by law shall be properly endorsed or accompanied by properly executed instruments of transfer or, if such certificates may be registered, registered in the name of such Holder or as ordered by such Holder in any Withdrawal Order) or by such other means as the Depositary may deem practicable, including, without limitation, by transfer of record ownership thereof to an account designated in the Withdrawal Order maintained either by the Company or an accredited intermediary, such as a bank, acting as a registrar for the Deposited Securities. To the extent any instructions, input, consent, notice and/or other actions on the part of the Company are required in order for the Company or its share registrar and/or transfer agent to process Share delivery instructions, the Company shall not unreasonably withhold the provision of such instructions, input, consent or notice or the taking of any such other action. If the Company’s share registrar and/or transfer agent refuses to process any Share delivery instructions, the Company will provide reasonable cooperation to the Depositary in its efforts to cause such instructions to be processed. The obligations of the Company set forth in this Section 6 shall survive the termination of this Deposit Agreement until all ADSs issued by the Depositary have been cancelled.

 

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7. Substitution of ADRs. The Depositary shall execute and deliver a new Direct Registration ADR in exchange and substitution for any mutilated certificated ADR upon cancellation thereof or in lieu of and in substitution for such destroyed, lost or stolen certificated ADR, unless the Depositary has notice that such ADR has been acquired by a bona fide purchaser, upon the Holder thereof filing with the Depositary a request for such execution and delivery and a sufficient indemnity bond and satisfying any other reasonable requirements imposed by the Depositary.

8. Cancellation and Destruction of ADRs; Maintenance of Records. All ADRs surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is authorized to destroy ADRs in certificated form so cancelled in accordance with its customary practices. The Depositary, however, shall maintain or cause its agents to maintain records of all ADRs surrendered and Deposited Securities withdrawn under Section 6 hereof and paragraph (2) of the form of ADR, substitute ADRs delivered under Section 7 hereof, and canceled or destroyed ADRs under this Section 8, in keeping with the procedures ordinarily followed by stock transfer agents located in the United States or as required by the laws or regulations governing the Depositary.

9. The Custodian.

(a) Rights of the Depositary. Any Custodian in acting hereunder shall be subject to the directions of the Depositary and shall be responsible solely to it. The Depositary may add, replace or remove a Custodian. The Depositary will give prompt notice of any such action, which will be advance notice if practicable. The Depositary may discharge any Custodian at any time upon notice to the Custodian being discharged.

(b) Rights of the Custodian. Any Custodian may resign from its duties hereunder by providing at least 30 days’ prior written notice to the Depositary. Any Custodian ceasing to act hereunder as Custodian shall deliver, upon the instruction of the Depositary, all Deposited Securities held by it to a Custodian continuing to act. Notwithstanding anything to the contrary contained in this Deposit Agreement (including the ADRs) and, subject to the further limitations set forth in subparagraph (q) of paragraph (14) of the form of ADR (Exoneration), the Depositary shall not be responsible for, and shall incur no liability in connection with or arising from, any act or omission to act on the part of the Custodian except to the extent that any Holder has incurred liability directly as a result of the Custodian having (i) committed fraud, willful misconduct or gross negligence in the provision of custodial services to the Depositary or (ii) failed to use reasonable care in the provision of custodial services to the Depositary as determined in accordance with the standards prevailing in the jurisdiction in which the Custodian is located.

 

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10. Lists of Holders. The Company shall have the right to inspect transfer records of the Depositary and its agents and the ADR Register, take copies thereof and require the Depositary and its agents to supply copies of such portions of such records as the Company may request. The Depositary or its agent shall furnish to the Company promptly upon the written request of the Company, a list of the names, addresses and holdings of ADSs by all Holders as of a date within seven days of the Depositary’s receipt of such request.

11. Depositary’s Agents. The Depositary may perform its obligations under this Deposit Agreement through any agent appointed by it, provided that the Depositary shall notify the Company of such appointment and shall remain responsible for the performance of such obligations as if no agent were appointed, subject to paragraph (14) of the form of ADR (Exoneration).

12. Resignation and Removal of the Depositary; Appointment of Successor Depositary.

(a) Resignation of the Depositary. The Depositary may at any time resign as Depositary hereunder by written notice of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

(b) Removal of the Depositary. The Depositary may at any time be removed by the Company by providing no less than 60 days’ prior written notice of such removal to the Depositary, such removal to take effect on the later of (i) the 60th day after such notice of removal is first provided and (ii) the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. Notwithstanding the foregoing, if upon the resignation or removal of the Depositary a successor depositary is not appointed within the applicable 60-day period as specified in paragraph (17) of the form of ADR (Termination), then the Depositary may elect to terminate this Deposit Agreement and the ADR and the provisions of said paragraph (17) shall thereafter govern the Depositary’s obligations hereunder.

 

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(c) Appointment of Successor Depositary. In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor. The predecessor depositary, only upon payment of all sums due to it and on the written request of the Company, shall (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than its rights to indemnification and fees owing, each of which shall survive any such removal and/or resignation), (ii) duly assign, transfer and deliver all right, title and interest to the Deposited Securities to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding ADRs. Any such successor depositary shall promptly mail notice of its appointment to such Holders. Any bank or trust company into or with which the Depositary may be merged or consolidated, or to which the Depositary shall transfer substantially all its American depositary receipt business, shall be the successor of the Depositary without the execution or filing of any document or any further act.

13. Reports. On or before the first date on which the Company makes any communication available to holders of Deposited Securities or any securities regulatory authority or stock exchange, by publication or otherwise, the Company shall transmit to the Depositary a copy thereof in English or with an English translation or summary. The Company has delivered to the Depositary, the Custodian and any Transfer Office, a copy of all provisions of or governing the Shares and any other Deposited Securities issued by the Company or any affiliate of the Company and, promptly upon any change thereto, the Company shall deliver to the Depositary, the Custodian and any Transfer Office, a copy (in English or with an English translation) of such provisions as so changed. The Depositary and its agents may rely upon the Company’s delivery of all such communications, information and provisions for all purposes of this Deposit Agreement and the Depositary shall have no liability for the accuracy or completeness of any thereof.

14. Additional Shares. The Company agrees with the Depositary that neither the Company nor any company controlling, controlled by or under common control with the Company shall (a) issue (i) additional Shares, (ii) rights to subscribe for Shares, (iii) securities convertible into or exchangeable for Shares or (iv) rights to subscribe for any such securities or (b) deposit any Shares under this Deposit Agreement, except, in each case, under circumstances complying in all respects with the Securities Act of 1933. At the reasonable request of the Depositary where it deems necessary, the Company will furnish the Depositary with legal opinions, in forms and from counsels reasonably acceptable to the Depositary, dealing with such issues requested by the Depositary. The Depositary will not knowingly accept for deposit hereunder any Shares required to be registered under the Securities Act of 1933 unless a registration statement is in effect and will use reasonable efforts to comply with written instructions of the Company not to accept for deposit hereunder any Shares identified in such instructions at such times and under such circumstances as may reasonably be specified in such instructions in order to facilitate the Company’s compliance with the laws, rules and regulations of the United States, including, but not limited to, the Securities Act of 1933 and the rules and regulations promulgated thereunder.

 

 

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15. Indemnification.

(a) Indemnification by the Company. The Company shall indemnify, defend and save harmless each of the Depositary, the Custodian and their respective directors, officers, employees, agents and affiliates against any direct loss, liability or expense (including reasonable fees and expenses of counsel) which may directly arise out of acts performed or omitted, in connection with the provisions of this Deposit Agreement and of the ADRs, as the same may be amended, modified or supplemented from time to time in accordance herewith (i) by either the Depositary or a Custodian or their respective directors, officers, employees, agents and affiliates, except for any liability or expense directly arising out of the negligence, or willful misconduct of the Depositary or its directors, officers or affiliates acting in their capacities as such hereunder, or (ii) by the Company or any of its directors, officers, employees, agents and affiliates.

The indemnities set forth in the preceding paragraph shall also apply to any liability or expense which may arise out of any misstatement or alleged misstatement or omission or alleged omission in any registration statement, proxy statement, prospectus (or placement memorandum), or preliminary prospectus (or preliminary placement memorandum) relating to the offer, issuance, withdrawal or sale of ADSs or the deposit of Shares in connection therewith, except to the extent any such liability or expense arises out of (i) information relating to the Depositary or its agents (other than the Company), as applicable, furnished in writing by the Depositary expressly for use in any of the foregoing documents and not changed or altered by the Company or any other person (other than the Depositary) or (ii) if such information is provided, the failure to state a material fact therein necessary to make the information provided, in light of the circumstance under which provided, not misleading.

(b) Indemnification by the Depositary. Subject to the limitations provided for in Section 15(c) below, the Depositary shall indemnify, defend and save harmless the Company against any direct loss, liability or expense (including reasonable fees and expenses of counsel) incurred by the Company in respect of this Deposit Agreement to the extent such loss, liability or expense is due to the negligence or willful misconduct of the Depositary.

 

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(c) Damages or Lost Profits. Notwithstanding any other provision of this Deposit Agreement or the ADRs to the contrary, neither the Depositary, the Company, nor any of their respective agents shall be liable to the other for any indirect, special, punitive or consequential damages (excluding reasonable fees and expenses of counsel) or lost profits, in each case of any form (collectively, “Special Damages”) incurred by any of them, or liable to any other person or entity (including, without limitation, Holders and Beneficial Owners) for any Special Damages, or any legal fees and expenses in connection therewith, whether or not foreseeable and regardless of the type of action in which such a claim may be brought provided, however, that (i) notwithstanding the foregoing and, for the avoidance of doubt, the Depositary and its agents shall be entitled to legal fees and expenses in defending against any claim for Special Damages and (ii) to the extent Special Damages arise from or out of a claim brought by a third party (including, without limitation, Holders and Beneficial Owners) against the Depositary, in its capacity as the Depositary, or any of its agents, the Depositary, in its capacity as the Depositary, and its agents shall be entitled to full indemnification from the Company for all such Special Damages, and reasonable fees and expenses of counsel in connection therewith, unless such Special Damages are found to have been a direct result of the gross negligence or willful misconduct of the Depositary.

(d) Survival. The obligations set forth in this Section 15 shall survive the termination of this Deposit Agreement and the succession or substitution of any indemnified person.

16. Notices.

(a) Notice to Holders. Notice to any Holder shall be deemed given when first mailed, first class postage prepaid, to the address of such Holder on the ADR Register or received by such Holder. Failure to notify a Holder or any defect in the notification to a Holder shall not affect the sufficiency of notification to other Holders or to the Beneficial Owners of the ADSs evidenced by the ADRs held by such other Holders. The Depositary’s only notification obligations under this Deposit Agreement and the ADRs shall be to Holders. Notice to a Holder shall be deemed, for all purposes of the Deposit Agreement and the ADRs, to constitute notice to any and all Beneficial Owners of the ADSs evidenced by such Holder’s ADRs.

(b) Notice to the Depositary or the Company. Notice to the Depositary or the Company shall be deemed given when first received by it at the address or facsimile transmission number or email address set forth in (i) or (ii), respectively, or at such other address or facsimile transmission number or email as either may specify to the other by written notice:

 

  (i)

JPMorgan Chase Bank, N.A.

383 Madison Avenue, Floor 11

New York, New York, 10179

Attention: Depositary Receipts Group

Fax: (302) 220-4591

 

  (ii)

TDCX Inc.

750D Chai Chee Road,

#06-01/06

ESR BizPark @ Chai Chee

Singapore 469004

Attention: Mr. Edward Goh

Email: Edward.Goh@tdcx.com, with copy to

legal@tdcx.com

 

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17. Counterparts. This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one instrument. Delivery of an executed signature page of this Deposit Agreement by facsimile or other electronic transmission (including “.pdf”, “.tif” or similar format) shall be effective as delivery of a manually executed counterpart hereof.

18. No Third-Party Beneficiaries; Holders and Beneficial Owners as Parties; Binding Effect. This Deposit Agreement is for the exclusive benefit of the Company, the Depositary, the Holders, and each and any of their respective successors hereunder, and, except to the extent specifically set forth in Section 15 of this Deposit Agreement, shall not give any legal or equitable right, remedy or claim whatsoever to any other person. The Holders and Beneficial Owners from time to time shall be parties to this Deposit Agreement and shall be bound by all of the provisions hereof. A Beneficial Owner shall only be able to exercise any right or receive any benefit hereunder solely through the Holder of the ADR(s) evidencing the ADSs owned by such Beneficial Owner.

19. Severability. If any provision contained in this Deposit Agreement or in the ADRs is, or becomes, invalid, illegal or unenforceable in any respect, the remaining provisions contained herein and therein shall in no way be affected thereby.

20. Governing Law; Consent to Jurisdiction.

(a) Governing Law. The Deposit Agreement, the ADSs and the ADRs shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to the application of the conflict of law principles thereof.

(b) By the Company and the Depositary. The Company and the Depositary agree that the United States District Court for the Southern District of New York (or, if the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts of New York County, New York) shall have non-exclusive jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute between them that does not involve any other person or party such as, without limitation, any Holder or Beneficial Owner, that may arise out of or relate in any way to this Deposit Agreement, including, without limitation, claims under the Securities Act of 1933, and, for such purposes, each irrevocably submits to the jurisdiction of such courts. Notwithstanding the foregoing or anything in this Deposit Agreement to the contrary, subject to the federal securities law carve-out set forth in Section 20(d) below, the Depositary may refer any such suit, action or proceeding to arbitration in accordance with the provisions of the Deposit Agreement and, upon such referral, any such suit, action or proceeding instituted by the Company shall be finally decided in such arbitration rather than in such court.

 

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(c) By Holders and Beneficial Owners. Holders and Beneficial Owners understand, and by holding an ADS or an interest therein such Holders and Beneficial Owners each irrevocably agrees, that any legal suit, action or proceeding against or involving the Company or the Depositary, regardless of whether such legal suit, action or proceeding also involves parties other than the Company or the Depositary, arising out of or related in any way to the Deposit Agreement, the ADSs, the ADRs or the transactions contemplated hereby or thereby or by virtue of ownership thereof, including without limitation claims under the Securities Act of 1933, may only be instituted in the United States District Court for the Southern District of New York (or, in the state courts of New York County, New York if either (i) the United States District Court for the Southern District of New York lacks jurisdiction, or (ii) the designation of the United States District Court for the Southern District of New York as the exclusive forum is, or becomes, invalid, illegal or unenforceable), and by holding or owning an ADR or ADS or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Notwithstanding the foregoing or anything in this Deposit Agreement to the contrary, subject to the federal securities law carve-out set forth in Section 20(d) below, the Depositary may refer any such suit, action or proceeding to arbitration in accordance with the provisions of the Deposit Agreement and, upon such referral, any such suit, action or proceeding instituted by Holders and/or Beneficial Owners shall be finally decided in such arbitration or proceeding instituted by Holders and/or Beneficial Owners shall be finally decided in such arbitration rather than in such court.

 

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(d) Optional Arbitration. Notwithstanding anything in this Deposit Agreement to the contrary, each of the parties hereto (i.e. the Company, the Depositary and all Holders and Beneficial Owners) agrees that: (i) the Depositary may, in its sole discretion, elect to institute any dispute, suit, action, controversy, claim or proceeding directly or indirectly arising out of, based upon or relating in any way to this Deposit Agreement, the ADSs, the ADRs or the transactions contemplated herein, therein, hereby or thereby, including without limitation any question regarding its or their existence, validity, interpretation, performance or termination (a “Dispute”) against any other party or parties hereto (including, without limitation, Disputes, suits, actions or proceedings brought against Holders and Beneficial Owners) or any other person or party, by having the Dispute referred to and finally resolved by an arbitration conducted under the terms set out below, and (ii) the Depositary may in its sole discretion require, by written notice to the relevant person or party, or persons or parties, that any Dispute, suit, action, controversy, claim or proceeding brought by any party or parties hereto or any other person or party (including, without limitation, Disputes, suits, actions or proceedings brought by Holders and Beneficial Owners) against the Depositary shall be referred to and finally settled by an arbitration conducted under the terms set out below; provided however, notwithstanding the Depositary’s written notice under this clause (ii), to the extent there are specific federal securities law violation aspects to any claims against the Company and/or the Depositary brought by any Holder, Beneficial Owner or other person or party, the federal securities law violation aspects of such claims brought by a Holder or Beneficial Owner or any other person or party against the Company and/or the Depositary may, at the option of such Holder, Beneficial Owner, person or party, remain in the United States District Court for the Southern District of New York (or, if the United District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, in the state courts of New York County in New York) and all other aspects, claims, Disputes, legal suits, actions and/or proceedings brought by such Holder, Beneficial Owner, person or party against the Company and/or the Depositary, including those brought along with, or in addition to, federal securities law violation claims, would be referred to arbitration in accordance herewith. Any such arbitration shall, at the Depositary’s election, be conducted either in New York, New York in accordance with the Commercial Arbitration Rules of the American Arbitration Association or in Hong Kong following the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL) with the Hong Kong International Arbitration Centre serving as the appointing authority, and the language of any such arbitration shall be English. A notice of arbitration may be mailed to the Company at its address last specified for notices under this Deposit Agreement, and, if applicable, to any Holders at their addresses on the ADR Register, which notice to any such Holder, for the avoidance of doubt, shall be deemed, for all purposes of the Deposit Agreement and the ADRs, including, without limitation, the arbitration provisions contained in this clause (b), constitute notice to any and all Owners of the ADSs evidenced by such Holder’s ADRs. In any case where the Depositary exercises its right to arbitrate hereunder, arbitration of the Dispute shall be mandatory and any pending litigation arising out of or related to such Dispute shall be stayed. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The number of arbitrators shall be three, each of whom shall be disinterested in the dispute or controversy, shall have no connection with any party thereto, and shall be an attorney experienced in international securities transactions. Each of the Company and the Depositary shall appoint one arbitrator and the two arbitrators shall select a third arbitrator who shall serve as chairperson of the tribunal. If a Dispute shall involve more than two parties, the parties shall attempt to align themselves in two sides (i.e., claimant and respondent), each of which shall appoint one arbitrator as if there were only two parties to such Dispute. If either or both parties fail to select an arbitrator, or if such alignment (in the event there are more than two parties) shall not have occurred, within thirty (30) calendar days after the Depositary serves the arbitration demand or the two arbitrators fail to select a third arbitrator within thirty (30) calendar days of the selection of the second arbitrator, the American Arbitration Association in the case of an arbitration in New York, or the Hong Kong International Arbitration Centre in the case of an arbitration in Hong Kong, shall appoint the remaining arbitrator or arbitrators in accordance with its rules. The parties and the American Arbitration Association and/or the Hong Kong International Arbitration Centre, as the case may be, may appoint the arbitrators from among the nationals of any country, whether or not the appointing party or any other party to the arbitration is a national of that country. The arbitrators shall have no authority to award damages against any party not measured by the prevailing party’s actual damages and shall have no authority to award any consequential, special or punitive damages against any party and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of this Deposit Agreement. In all cases, the fees of the arbitrators and other costs incurred by the parties in connection with such arbitration shall be paid by the party (or parties) that is (or are) unsuccessful in such arbitration. No party hereto shall be entitled to join or consolidate disputes by or against others in any arbitration, or to include in any arbitration any dispute as a representative or member of a class, or act in any arbitration in the interest of the general public or in a private attorney general capacity.

 

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(e) Notwithstanding the foregoing or anything in this Deposit Agreement to the contrary, any suit, action or proceeding against the Company arising out of, based upon or relating in any way to this Deposit Agreement, the ADSs, the ADRs or the transactions contemplated herein, therein, hereby or thereby, may be instituted by the Depositary in any competent court in the Cayman Islands, Hong Kong, the United States and/or any other court of competent jurisdiction, or, subject to the federal securities law carve-out set forth in Section 20(d) above, by the Depositary through the commencement of an arbitration pursuant to Section 20(d) of this Deposit Agreement.

21. Agent for Service.

(a) Appointment. The Company has appointed Cogency Global Inc., New York, New York, as its authorized agent (the “Authorized Agent”) upon which process may be served in any such suit, action or proceeding arising out of or based on this Deposit Agreement, the ADSs, the ADRs or the transactions contemplated herein, therein or hereby which may be instituted in any state or federal court in New York, New York by the Depositary or any Holder, and waives any other requirements of or objections to personal jurisdiction with respect thereto. Subject to the Company’s rights to replace the Authorized Agent with another entity in the manner required were the Authorized Agent to have resigned, such appointment shall be irrevocable.

 

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(b) Agent for Service of Process. The Company represents and warrants that the Authorized Agent has agreed to act as said agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any suit, action or proceeding against the Company, by service by mail of a copy thereof upon the Authorized Agent (whether or not the appointment of such Authorized Agent shall for any reason prove to be ineffective or such Authorized Agent shall fail to accept or acknowledge such service), with a copy mailed to the Company by registered or certified air mail, postage prepaid, to its address provided in Section 16(b) hereof. The Company agrees that the failure of the Authorized Agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any suit, action or proceeding based thereon. If, for any reason, the Authorized Agent named above or its successor shall no longer serve as agent of the Company to receive service of process, summons, notices and documents in New York, the Company shall promptly appoint a successor that is a legal entity with offices in New York, New York, so as to serve and will promptly advise the Depositary thereof.

(c) Waiver of Personal Service of Process. In the event the Company fails to continue such designation and appointment in full force and effect, the Company hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices hereunder, and service so made shall be deemed completed five (5) days after the same shall have been so mailed.

22. Waiver of Immunities. To the extent that the Company or any of its properties, assets or revenues may have or may hereafter be entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or other matters under or arising out of or in connection with the Shares or Deposited Securities, the ADSs, the ADRs or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

 

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23. Waiver of Jury Trial. EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER OF, AND/OR HOLDER OF INTERESTS IN, ADSS OR ADRS) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY). No provision of this Deposit Agreement or any ADR is intended to constitute a waiver or limitation of any rights which Holders or Beneficial Owners may have under the Securities Act of 1933 or the Securities Exchange Act of 1934, to the extent applicable.

 

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IN WITNESS WHEREOF, TDCX Inc. and JPMORGAN CHASE BANK, N.A. have duly executed this Deposit Agreement as of the day and year first above set forth and all Holders and Beneficial Owners shall become parties hereto upon acceptance by them of ADSs issued in accordance with the terms hereof, or upon acquisition of any beneficial interest therein.

 

TDCX Inc.
By:  

         

Name:
Title
JPMORGAN CHASE BANK, N.A.
By:  

         

Name:
Title: Executive Director

 

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EXHIBIT A

ANNEXED TO AND INCORPORATED IN

DEPOSIT AGREEMENT

[FORM OF FACE OF ADR]

 

                No. of ADSs:
Number     
     Each ADS represents
     [EXCHANGE] Share
     CUSIP:

AMERICAN DEPOSITARY RECEIPT

evidencing

AMERICAN DEPOSITARY SHARES

representing

CLASS A ORDINARY SHARES

of

TDCX INC.

(Incorporated under the laws of Cayman Islands)

JPMORGAN CHASE BANK, N.A., a national banking association organized under the laws of the United States of America, as depositary hereunder (the “Depositary”), hereby certifies that                  is the registered owner (a “Holder”) of American Depositary Shares (“ADSs”), each (subject to paragraph (13) (Changes Affecting Deposited Securities)) representing [RATIO] Class A ordinary share[s] (including the rights to receive Shares described in paragraph (1) (Issuance of ADSs), “Shares” and, together with any other securities, cash or property from time to time held by the Depositary in respect or in lieu of deposited Shares, the “Deposited Securities”), of TDCX Inc., an exempted company incorporated with limited liability under the laws of Cayman Islands (the “Company”), deposited under the Deposit Agreement dated as of _________, 2021 (as amended from time to time, the “Deposit Agreement”) among the Company, the Depositary and all Holders and Beneficial Owners from time to time of American Depositary Receipts issued thereunder (“ADRs”), each of whom by accepting an ADR becomes a party thereto. The Deposit Agreement and this ADR (which includes the provisions set forth on the reverse hereof) shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to the application of the conflict of law principles thereof. All capitalized terms used herein, and not defined herein, shall have the meanings ascribed to such terms in the Deposit Agreement.

 

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(1) Issuance of ADSs.

(a) Issuance. This ADR is one of the ADRs issued under the Deposit Agreement. Subject to the other provisions hereof, the Depositary may so issue ADRs for delivery at the Transfer Office (as hereinafter defined) only against deposit of: (i) Shares in a form satisfactory to the Custodian; or (ii) rights to receive Shares from the Company or any registrar, transfer agent, clearing agent or other entity recording Share ownership or transactions.

(b) Lending. In its capacity as Depositary, the Depositary shall not lend Shares or ADSs.

(c) Representations and Warranties of Depositors. Every person depositing Shares under the Deposit Agreement represents and warrants that:

 

  (i)

such Shares and the certificates therefor are duly authorized, validly issued and outstanding, fully paid, nonassessable and legally obtained by such person,

 

  (ii)

all pre-emptive and comparable rights, if any, with respect to such Shares have been validly waived or exercised,

 

  (iii)

the person making such deposit is duly authorized so to do,

 

  (iv)

the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim and

 

  (v)

such Shares (A) are not “restricted securities” as such term is defined in Rule 144 under the Securities Act of 1933 (“Restricted Securities”) unless at the time of deposit the requirements of paragraphs (c), (e), (f) and (h) of Rule 144 shall not apply and such Shares may be freely transferred and may otherwise be offered and sold freely in the United States or (B) have been registered under the Securities Act of 1933. To the extent the person depositing Shares is an “affiliate” of the Company as such term is defined in Rule 144, the person also represents and warrants that upon the sale of the ADSs, all of the provisions of Rule 144 which enable the Shares to be freely sold (in the form of ADSs) will be fully complied with and, as a result thereof, all of the ADSs issued in respect of such Shares will not be on the sale thereof, Restricted Securities.

 

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Such representations and warranties shall survive the deposit and withdrawal of Shares and the issuance and cancellation of ADSs in respect thereof and the transfer of such ADSs.

(d) The Depositary may refuse to accept for such deposit any Shares identified by the Company in order to facilitate compliance with the requirements of the Securities Act of 1933 or the Rules made thereunder.

(2) Withdrawal of Deposited Securities. Subject to paragraphs (4) (Certain Limitations to Registration, Transfer etc.) and (5) (Liability for Taxes, Duties and Other Charges), upon surrender of (a) a certificated ADR in a form satisfactory to the Depositary at the Transfer Office or (b) proper instructions and documentation in the case of a Direct Registration ADR, the Holder hereof is entitled to delivery at, or to the extent in dematerialized form from, the Custodian’s office of the Deposited Securities at the time represented by the ADSs evidenced by this ADR. In the Deposit Agreement the Company has agreed that, to the extent any instructions, input, consent, notice and/or other actions on the part of the Company are required in order for the Company or its share registrar and/or transfer agent to process Share delivery instructions, the Company shall not unreasonably withhold the provision of such instructions, input, consent or notice or the taking of any such other action. If the Company’s share registrar and/or transfer agent refuses to process any Share delivery instructions, the Company will provide all reasonable cooperation to the Depositary in its efforts to cause such instructions to be processed. At the request, risk and expense of the Holder hereof, the Depositary may deliver such Deposited Securities at such other place as may have been requested by the Holder. Notwithstanding any other provision of the Deposit Agreement or this ADR, the withdrawal of Deposited Securities may be restricted only for the reasons set forth in General Instruction I.A.(1) of Form F-6 (as such instructions may be amended from time to time) under the Securities Act of 1933.

 

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(3) Transfers, Split-Ups and Combinations of ADRs. The Depositary or its agent will keep, at a designated transfer office (the “Transfer Office”), (i) a register (the “ADR Register”) for the registration, registration of transfer, combination and split-up of ADRs, and, in the case of Direct Registration ADRs, shall include the Direct Registration System, which at all reasonable times will be open for inspection by Holders and the Company for the purpose of communicating with Holders in the interest of the business of the Company or a matter relating to the Deposit Agreement and (ii) facilities for the delivery and receipt of ADRs. The term ADR Register includes the Direct Registration System. Title to this ADR (and to the Deposited Securities represented by the ADSs evidenced hereby), when properly endorsed (in the case of ADRs in certificated form) or upon delivery to the Depositary of proper instruments of transfer, is transferable by delivery with the same effect as in the case of negotiable instruments under the laws of the State of New York; provided that the Depositary, notwithstanding any notice to the contrary, may treat the person in whose name this ADR is registered on the ADR Register as the absolute owner hereof for all purposes and neither the Depositary nor the Company will have any obligation or be subject to any liability under the Deposit Agreement or any ADR to any Beneficial Owner, unless such Beneficial Owner is the Holder hereof. Subject to paragraphs (4) and (5), this ADR is transferable on the ADR Register and may be split into other ADRs or combined with other ADRs into one ADR, evidencing the aggregate number of ADSs surrendered for split-up or combination, by the Holder hereof or by duly authorized attorney upon surrender of this ADR at the Transfer Office properly endorsed (in the case of ADRs in certificated form) or upon delivery to the Depositary of proper instruments of transfer and duly stamped as may be required by applicable law; provided that the Depositary may close the ADR Register at any time or from time to time when deemed expedient by it. At the request of a Holder, the Depositary shall, for the purpose of substituting a certificated ADR with a Direct Registration ADR, or vice versa, execute and deliver a certificated ADR or a Direct Registration ADR, as the case may be, for any authorized number of ADSs requested, evidencing the same aggregate number of ADSs as those evidenced by the certificated ADR or Direct Registration ADR, as the case may be, substituted.

(4) Certain Limitations to Registration, Transfer etc. Prior to the issue, registration, registration of transfer, split-up or combination of any ADR, the delivery of any distribution in respect thereof, or, subject to the last sentence of paragraph (2) (Withdrawal of Deposited Securities), the withdrawal of any Deposited Securities, and from time to time in the case of clause (b)(ii) of this paragraph (4), the Company, the Depositary or the Custodian may require:

(a) payment with respect thereto of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or registration fees in effect for the registration of transfers of Shares or other Deposited Securities upon any applicable register and (iii) any applicable charges as provided in paragraph (7) (Charges of Depositary) of this ADR;

(b) the production of proof satisfactory to it of (i) the identity of any signatory and genuineness of any signature and (ii) such other information, including without limitation, information as to citizenship, residence, exchange control approval, beneficial ownership of any securities, compliance with applicable law, regulations, provisions of or governing Deposited Securities and terms of the Deposit Agreement and this ADR, as it may deem necessary or proper; and

 

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(c) compliance with such regulations as the Depositary may establish consistent with the Deposit Agreement.

The issuance of ADRs, the acceptance of deposits of Shares, the registration, registration of transfer, split-up or combination of ADRs or, subject to the last sentence of paragraph (2) (Withdrawal of Deposited Securities), the withdrawal of Deposited Securities may be suspended, generally or in particular instances, when the ADR Register or any register for Deposited Securities is closed or when any such action is deemed advisable by the Depositary.

(5) Liability for Taxes, Duties and Other Charges. If any tax or other governmental charges (including any penalties and/or interest) shall become payable by or on behalf of the Custodian or the Depositary with respect to this ADR, any Deposited Securities represented by the ADSs evidenced hereby or any distribution thereon, such tax or other governmental charge shall be paid by the Holder hereof to the Depositary and by holding or having held this ADR or any ADSs evidenced hereby, the Holder and all Beneficial Owners hereof and thereof, and all prior Holders and Beneficial Owners hereof and thereof, jointly and severally, agree to indemnify, defend and save harmless each of the Depositary, the Company and their respective agents in respect of such tax or other governmental charge. Neither the Company nor the Depositary shall be liable to Holders or Beneficial Owners of the ADSs and ADRs for failure of any of them to comply with applicable tax laws, rules and/or regulations. Each Holder of this ADR and Beneficial Owner of the ADSs evidenced hereby, and each prior Holder and Beneficial Owner hereof and thereof (collectively, the “Tax Indemnitors”), by holding or having held an ADR or an interest in ADSs, acknowledges and agrees that the Depositary shall have the right to seek payment of amounts owing with respect to this ADR under this paragraph (5) from any one or more Tax Indemnitor(s) as determined by the Depositary in its sole discretion, without any obligation to seek payment from any other Tax Indemnitor(s).The Depositary may refuse to effect any registration, registration of transfer, split-up or combination hereof or, subject to the last sentence of paragraph (2) (Withdrawal of Deposited Securities), any withdrawal of such Deposited Securities until such payment is made. The Depositary may also deduct from any distributions on or in respect of Deposited Securities, or may sell by public or private sale for the account of the Holder hereof any part or all of such Deposited Securities (after attempting by reasonable means to notify the Holder hereof prior to such sale), and may apply such deduction or the proceeds of any such sale in payment of such tax or other governmental charge, the Holder hereof remaining liable for any deficiency, and shall reduce the number of ADSs evidenced hereby to reflect any such sales of Shares. In connection with any distribution to Holders, the Company will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Company; and the Depositary and the Custodian will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Depositary or the Custodian. If the Depositary determines that any distribution in property other than cash (including Shares or rights) on Deposited Securities is subject to any tax that the Depositary or the Custodian is obligated to withhold, the Depositary may dispose of all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes, by public or private sale, and the Depositary shall distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes to the Holders entitled thereto. Each Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian and any of their respective officers, directors, employees, agents and affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained which obligations shall survive any transfer or surrender of ADSs or the termination of the Deposit Agreement.

 

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(6) Disclosure of Interests.

(a) General. To the extent that the provisions of or governing any Deposited Securities may require disclosure of or impose limits on beneficial or other ownership of, or interests in, Deposited Securities, other Shares and other securities and may provide for blocking transfer, voting or other rights to enforce such disclosure or limits, Holders and Beneficial Owners agree to comply with all such disclosure requirements and ownership limitations and to comply with any reasonable Company instructions in respect thereof. The Company reserves the right to instruct Holders (and through any such Holder, the Beneficial Owners of ADSs evidenced by the ADRs registered in such Holder’s name) to deliver their ADSs for cancellation and withdrawal of the Deposited Securities so as to permit the Company to deal directly with the Holder and/or Beneficial Owner thereof as a holder of Shares and Holders and Beneficial Owners agree to comply with such instructions. The Depositary agrees to cooperate with the Company in its efforts to inform Holders of the Company’s exercise of its rights under this paragraph and agrees to consult with, and provide reasonable assistance without risk, liability or expense on the part of the Depositary, to the Company on the manner or manners in which it may enforce such rights with respect to any Holder, provided, however, for the avoidance of doubt, the Depositary shall be indemnified by the Company in connection with the foregoing.

 

 

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(b) Jurisdiction Specific.

Any summary of the laws and regulations of the Cayman Islands and of the terms of the Company’s constituent documents has been provided solely for the convenience of Holders, Beneficial Owners and the Depositary. Such summaries are summaries and as such may not include all aspects of the materials summarized applicable to a Holder or Beneficial Owner, and these laws and regulations and the Company’s constituent documents may change after the date of the Deposit Agreement. Neither the Depositary nor the Company has any obligation to update any such summaries.

(7) Charges of Depositary.

(a) Rights of the Depositary. The Depositary may charge, and collect from, (i) each person to whom ADSs are issued, including, without limitation, issuances against deposits of Shares, issuances in respect of Share Distributions, Rights and Other Distributions (as such terms are defined in paragraph (10) (Distributions on Deposited Securities)), issuances pursuant to a stock dividend or stock split declared by the Company, or issuances pursuant to a merger, exchange of securities or any other transaction or event affecting the ADSs or the Deposited Securities, and (ii) each person surrendering ADSs for withdrawal of Deposited Securities or whose ADSs are cancelled or reduced for any other reason U.S.$5.00 for each 100 ADSs (or portion thereof) issued, delivered, reduced, cancelled or surrendered, or upon which a Share Distribution or elective distribution is made or offered (as the case may be). The Depositary may sell (by public or private sale) sufficient securities and property received in respect of Share Distributions, Rights and Other Distributions prior to such deposit to pay such charge.

(b) Additional charges by the Depositary. The following additional charges shall also be incurred by the Holders, the Beneficial Owners, by any party depositing or withdrawing Shares or by any party surrendering ADSs and/or to whom ADSs are issued (including, without limitation, issuances pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the ADSs or the Deposited Securities or a distribution of ADSs pursuant to paragraph (10) (Distributions on Deposited Securities), whichever is applicable:

 

  (i)

a fee of U.S.$0.05 or less per ADS held for any Cash distribution made, or for any elective cash/stock dividend offered, pursuant to the Deposit Agreement,

 

  (ii)

a fee for the distribution or sale of securities pursuant to paragraph (10) hereof, such fee being in an amount equal to the fee for the execution and delivery of ADSs referred to above which would have been charged as a result of the deposit of such securities (for purposes of this paragraph (7) treating all such securities as if they were Shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the Depositary to Holders entitled thereto,

 

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  (iii)

an aggregate fee of U.S.$0.05 or less per ADS per calendar year (or portion thereof) for services performed by the Depositary in administering the ADRs (which fee may be charged on a periodic basis during each calendar year and shall be assessed against Holders as of the record date or record dates set by the Depositary during each calendar year and shall be payable at the sole discretion of the Depositary by billing such Holders or by deducting such charge from one or more cash dividends or other cash distributions), and

 

  (iv)

a fee for the reimbursement of such fees, charges and expenses as are incurred by the Depositary and/or any of its agents (including, without limitation, the Custodian and expenses incurred on behalf of Holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in connection with the servicing of the Shares or other Deposited Securities, the sale of securities (including, without limitation, Deposited Securities), the delivery of Deposited Securities or otherwise in connection with the Depositary’s or its Custodian’s compliance with applicable law, rule or regulation (which fees and charges shall be assessed on a proportionate basis against Holders as of the record date or dates set by the Depositary and shall be payable at the sole discretion of the Depositary by billing such Holders or by deducting such charge from one or more cash dividends or other cash distributions).

(c) Other Obligations and Charges. The Company will pay all other charges and expenses of the Depositary and any agent of the Depositary (except the Custodian) pursuant to agreements from time to time between the Company and the Depositary, except:

 

  (i)

stock transfer or other taxes and other governmental charges (which are payable by Holders or persons depositing Shares);

 

  (ii)

SWIFT, cable, telex and facsimile transmission and delivery charges incurred at the request of persons depositing, or Holders delivering Shares, ADRs or Deposited Securities (which are payable by such persons or Holders); and

 

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  (iii)

transfer or registration fees for the registration or transfer of Deposited Securities on any applicable register in connection with the deposit or withdrawal of Deposited Securities (which are payable by persons depositing Shares or Holders withdrawing Deposited Securities and there are no such fees in respect of the Shares as of the date of the Deposit Agreement.

(d) Foreign Exchange Related Matters. To facilitate the administration of various depositary receipt transactions, including disbursement of dividends or other cash distributions and other corporate actions, the Depositary may engage the foreign exchange desk within JPMorgan Chase Bank, N.A. (the “Bank”) and/or its affiliates in order to enter into spot foreign exchange transactions to convert foreign currency into U.S. dollars (“FX Transactions”). For certain currencies, FX Transactions are entered into with the Bank or an affiliate, as the case may be, acting in a principal capacity. For other currencies, FX Transactions are routed directly to and managed by an unaffiliated local custodian (or other third party local liquidity provider), and neither the Bank nor any of its affiliates is a party to such FX Transactions.

The foreign exchange rate applied to an FX Transaction will be either (a) a published benchmark rate, or (b) a rate determined by a third party local liquidity provider, in each case plus or minus a spread, as applicable. The Depositary will disclose which foreign exchange rate and spread, if any, apply to such currency on the “Disclosure” page (or successor page) of www.adr.com (as updated by the Depositary from time to time, “ADR.com”). Such applicable foreign exchange rate and spread may (and neither the Depositary, the Bank nor any of their affiliates is under any obligation to ensure that such rate does not) differ from rates and spreads at which comparable transactions are entered into with other customers or the range of foreign exchange rates and spreads at which the Bank or any of its affiliates enters into foreign exchange transactions in the relevant currency pair on the date of the FX Transaction. Additionally, the timing of execution of an FX Transaction varies according to local market dynamics, which may include regulatory requirements, market hours and liquidity in the foreign exchange market or other factors. Furthermore, the Bank and its affiliates may manage the associated risks of their position in the market in a manner they deem appropriate without regard to the impact of such activities on the Company, the Depositary, Holders or Beneficial Owners. The spread applied does not reflect any gains or losses that may be earned or incurred by the Bank and its affiliates as a result of risk management or other hedging related activity.

Notwithstanding the foregoing, to the extent the Company provides U.S. dollars to the Depositary, neither the Bank nor any of its affiliates will execute an FX Transaction as set forth herein. In such case, the Depositary will distribute the U.S. dollars received from the Company.

 

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Further details relating to the applicable foreign exchange rate, the applicable spread and the execution of FX Transactions will be provided by the Depositary on ADR.com. The Company, Holders and Beneficial Owners each acknowledge and agree that the terms applicable to FX Transactions disclosed from time to time on ADR.com will apply to any FX Transaction executed pursuant to the Deposit Agreement.

(e) Disclosure of Potential Depositary Payments. The Depositary anticipates reimbursing the Company for certain expenses incurred by the Company that are related to the establishment and maintenance of the ADR program upon such terms and conditions as the Company and the Depositary may agree from time to time. The Depositary may make available to the Company a set amount or a portion of the Depositary fees charged in respect of the ADR program or otherwise upon such terms and conditions as the Company and the Depositary may agree from time to time.

(f) The right of the Depositary to receive payment of fees, charges and expenses as provided above shall survive the termination of the Deposit Agreement. As to any Depositary, upon the resignation or removal of such Depositary, such right shall extend for those fees, charges and expenses incurred prior to the effectiveness of such resignation or removal.

(8) Available Information. The Deposit Agreement, the provisions of or governing Deposited Securities and any written communications from the Company, which are both received by the Custodian or its nominee as a holder of Deposited Securities and made generally available to the holders of Deposited Securities, are available for inspection by Holders at the offices of the Depositary and the Custodian, at the Transfer Office, on the U.S. Securities and Exchange Commission’s website, or upon request from the Depositary (which request may be refused by the Depositary at its discretion). The Depositary will distribute copies of such communications (or English translations or summaries thereof) to Holders when furnished by the Company. The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and accordingly files certain reports with the United States Securities and Exchange Commission (the “Commission”). Such reports and other information may be inspected and copied through the Commission’s EDGAR system or at public reference facilities maintained by the Commission located at the date hereof at 100 F Street, NE, Washington, DC 20549..

(9) Execution. This ADR shall not be valid for any purpose unless executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary.

 

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Dated:

 

JPMORGAN CHASE BANK, N.A., as Depositary
By  

 

Authorized Officer

The Depositary’s office is located at 383 Madison Avenue, Floor 11, New York, New York 10179.

 

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[FORM OF REVERSE OF ADR]

(10) Distributions on Deposited Securities. Subject to paragraphs (4) (Certain Limitations to Registration, Transfer etc.) and (5) (Liability for Taxes, Duties and other Charges), to the extent practicable, the Depositary will distribute to each Holder entitled thereto on the record date set by the Depositary therefor at such Holder’s address shown on the ADR Register, in proportion to the number of Deposited Securities (on which the following distributions on Deposited Securities are received by the Custodian) represented by ADSs evidenced by such Holder’s ADRs:

(a) Cash. Any U.S. dollars available to the Depositary resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof authorized in this paragraph (10) (“Cash”), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or impracticable with respect to certain Holders, and (iii) deduction of the Depositary’s and/or its agents’ fees and expenses in (1) converting any foreign currency to U.S. dollars by sale or in such other manner as the Depositary may determine to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or U.S. dollars to the United States by such means as the Depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time and (4) making any sale by public or private means in any commercially reasonable manner.

(b) Shares. (i) Additional ADRs evidencing whole ADSs representing any Shares available to the Depositary resulting from a dividend or free distribution on Deposited Securities consisting of Shares (a “Share Distribution”) and (ii) U.S. dollars available to it resulting from the net proceeds of sales of Shares received in a Share Distribution, which Shares would give rise to fractional ADSs if additional ADRs were issued therefor, as in the case of Cash.

(c) Rights. (i) Warrants or other instruments in the discretion of the Depositary representing rights to acquire additional ADRs in respect of any rights to subscribe for additional Shares or rights of any nature available to the Depositary as a result of a distribution on Deposited Securities (“Rights”), to the extent that the Company timely furnishes to the Depositary evidence satisfactory to the Depositary that the Depositary may lawfully distribute the same (the Company has no obligation to so furnish such evidence), or (ii) to the extent the Company does not so furnish such evidence and sales of Rights are practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Rights as in the case of Cash, or (iii) to the extent the Company does not so furnish such evidence and such sales cannot practicably be accomplished by reason of the nontransferability of the Rights, limited markets therefor, their short duration or otherwise, nothing (and any Rights may lapse).

 

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(d) Other Distributions. (i) Securities or property available to the Depositary resulting from any distribution on Deposited Securities other than Cash, Share Distributions and Rights (“Other Distributions”), by any means that the Depositary may deem equitable and practicable, or (ii) to the extent the Depositary deems distribution of such securities or property not to be equitable and practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Other Distributions as in the case of Cash.

The Depositary reserves the right to utilize a division, branch or affiliate of JPMorgan Chase Bank, N.A. to direct, manage and/or execute any public and/or private sale of securities hereunder. Such division, branch and/or affiliate may charge the Depositary a fee in connection with such sales, which fee is considered an expense of the Depositary contemplated above and/or under paragraph (7) (Charges of Depositary). Any U.S. dollars available will be distributed by checks drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability and dealt with by the Depositary in accordance with its then current practices. All purchases and sales of securities will be handled by the Depositary in accordance with its then current policies, which are currently set forth on the “Disclosures” page (or successor page) of ADR.com, the location and contents of which the Depositary shall be solely responsible for..

(11) Record Dates. The Depositary may, after consultation with the Company if practicable, fix a record date (which, to the extent applicable, shall be as near as practicable to any corresponding record date set by the Company) for the determination of the Holders who shall be responsible for the fee assessed by the Depositary for administration of the ADR program and for any expenses provided for in paragraph (7) hereof as well as for the determination of the Holders who shall be entitled to receive any distribution on or in respect of Deposited Securities, to give instructions for the exercise of any voting rights, to receive any notice or to act in respect of other matters and only such Holders shall be so entitled or obligated.

 

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(12) Voting of Deposited Securities.

(a) Notice of any Meeting or Solicitation. As soon as practicable after receipt of notice of any meeting at which the holders of Shares are entitled to vote, or of solicitation of consents or proxies from holders of Shares or other Deposited Securities, the Depositary shall fix the ADS record date in accordance with paragraph (11) above provided that if the Depositary receives a written request from the Company in a timely manner and at least 30 days prior to the date of such vote or meeting, the Depositary shall, at the Company’s expense, distribute to Holders a notice (the “Voting Notice”) stating (i) final information particular to such vote and meeting and any solicitation materials, (ii) that each Holder on the record date set by the Depositary will, subject to any applicable provisions of Cayman Islands law, be entitled to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by the ADSs evidenced by such Holder’s ADRs and (iii) the manner in which such instructions may be given or deemed given in accordance with paragraph 12(b)(ii) below, including instructions to give a discretionary proxy to a person designated by the Company. Each Holder shall be solely responsible for the forwarding of Voting Notices to the Beneficial Owners of ADSs registered in such Holder’s name. There is no guarantee that Holders and Beneficial Owners generally or any Holder or Beneficial Owner in particular will receive the notice described above with sufficient time to enable such Holder or Beneficial Owner to return any voting instructions to the Depositary in a timely manner.

(b) Voting of Deposited Securities.

(i) Following actual receipt by the ADR department responsible for proxies and voting of Holders’ instructions (including, without limitation, instructions of any entity or entities acting on behalf of the nominee for DTC), the Depositary shall, in the manner and on or before the time established by the Depositary for such purpose, endeavor to vote or cause to be voted the Deposited Securities represented by the ADSs evidenced by such Holders’ ADRs in accordance with such instructions insofar as practicable and permitted under the provisions of or governing Deposited Securities. The Depositary will not itself exercise any voting discretion in respect of any Deposited Securities.

(ii) To the extent that (A) the Depositary has been provided with at least 30 days’ notice of the proposed meeting from the Company, (B) the Voting Notice will be received by all Holders and Beneficial Owners no less than 10 days prior to the date of the meeting and/or the cut-off date for the solicitation of consents, and (C) the Depositary does not receive instructions on a particular agenda item from a Holder (including, without limitation, any entity or entities acting on behalf of the nominee for DTC) in a timely manner, such Holder shall be deemed, and the Depositary is instructed to deem such Holder, to have instructed the Depositary to give a discretionary proxy for such agenda item(s) to a person designated by the Company to vote the Deposited Securities represented by the ADSs for which actual instructions were not so given by all such Holders on such agenda item(s), provided that no such instruction shall be deemed given and no discretionary proxy shall be given unless (1) the Company informs the Depositary in writing (and the Company agrees to provide the Depositary with such instruction promptly in writing) that (a) it wishes such proxy to be given with respect to such agenda item(s), (b) there is no substantial opposition existing with respect to such agenda item(s) and (c) such agenda item(s), if approved, would not materially or adversely affect the rights of holders of Shares, and (2) the Depositary has obtained an opinion of counsel, in form and substance satisfactory to the Depositary, confirming that (i) the granting of such discretionary proxy does not subject the Depositary to any reporting obligations in the Cayman Islands, (ii) the granting of such proxy will not result in a violation of the laws, rules, regulations or permits of the Cayman Islands, (iii) the voting arrangement and deemed instruction as contemplated herein will be given effect under the laws, rules and regulations of the Cayman Islands, and (iv) the granting of such discretionary proxy will not under any circumstances result in the Shares represented by the ADSs being treated as assets of the Depositary under the laws, rules or regulations of the Cayman Islands.

 

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(iii) The Depositary may from time to time access information available to it to consider whether any of the circumstances described in (1)(b) or (1)(c) of subsection (ii) above exist, or request additional information from the Company in respect thereto. By taking any such action, the Depositary shall not in any way be deemed or inferred to have been required, or have had any duty or responsibility (contractual or otherwise), to monitor or inquire whether any of the circumstances described in (1)(b) or (1)(c) of subsection (ii) above existed. In addition to the limitations provided for in paragraph (14) hereof, Holders and Beneficial Owners are advised and agree that (a) the Depositary will rely fully and exclusively on the Company to inform the Depositary of any of the circumstances set forth in (1) of subsection (ii) above, and (b) neither the Depositary, the Custodian nor any of their respective agents shall be obliged to inquire or investigate whether any of the circumstances described in (1)(b) or (1)(c) of subsection (ii) above exist and/or whether the Company complied with its obligation to timely inform the Depositary of such circumstances. Neither the Depositary, the Custodian nor any of their respective agents shall incur any liability to Holders or Beneficial Owners (i) as a result of the Company’s failure to determine that any of the circumstances described in (1)(b) or (1)(c) of subsection (ii) above exist or its failure to timely notify the Depositary of any such circumstances or (ii) if any agenda item which is approved at a meeting has, or is claimed to have, a material or adverse effect on the rights of holders of Shares. Because there is no guarantee that Holders and Beneficial Owners will receive the notices described above with sufficient time to enable such Holders or Beneficial Owners to return any voting instructions to the Depositary in a timely manner, Holders and Beneficial Owners may be deemed to have instructed the Depositary to give a discretionary proxy to a person designated by the Company in such circumstances, and neither the Depositary, the Custodian nor any of their respective agents shall incur any liability to Holders or Beneficial Owners in such circumstances.

 

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(c) Alternative Methods of Distributing Materials. Notwithstanding anything contained in the Deposit Agreement or any ADR, the Depositary may, to the extent not prohibited by any law, rule or regulation or by the rules, regulations or requirements of the stock exchange on which the ADSs are listed, in lieu of distribution of the materials provided to the Depositary in connection with any meeting of or solicitation of consents or proxies from holders of Deposited Securities, distribute to the Holders a notice that provides Holders with or otherwise publicizes to Holders instructions on how to retrieve such materials or receive such materials upon request (i.e., by reference to a website containing the materials for retrieval or a contact for requesting copies of the materials). Holders are strongly encouraged to forward their voting instructions as soon as possible. Voting instructions will not be deemed received until such time as the ADR department responsible for proxies and voting has received such instructions, notwithstanding that such instructions may have been physically received by JPMorgan Chase Bank, N.A., as Depositary, prior to such time.

(d) Manner of Voting. The Depositary has been advised by the Company that under Cayman Islands law and the Memorandum and Articles of Association of the Company, each as in effect as of the date of the Deposit Agreement, voting at any meeting of shareholders of the Company is by show of hands unless a poll is (before or on the declaration of the results of the show of hands or on the withdrawal of any other demand for a poll) demanded. In the event that voting on any resolution or matter is conducted on a show of hands basis in accordance with the Memorandum and Articles of Association, the Depositary will refrain from voting and the voting instructions received by the Depositary from Holders shall lapse. The Depositary will not demand a poll or join in demanding a poll, whether or not requested to do so by Holders of ADSs.

(13) Changes Affecting Deposited Securities.

(a) Subject to paragraphs (4) (Certain Limitations to Registration, Transfer etc.) and (5) (Liability for Taxes, Duties and Other Charges), the Depositary may, in its discretion, and shall if reasonably requested by the Company, amend this ADR or distribute additional or amended ADRs (with or without calling this ADR for exchange) or cash, securities or property on the record date set by the Depositary therefor to reflect any change in par value, split-up, consolidation, cancellation or other reclassification of Deposited Securities, any Share Distribution or Other Distribution not distributed to Holders or any cash, securities or property available to the Depositary in respect of Deposited Securities from (and the Depositary is hereby authorized to surrender any Deposited Securities to any person and, irrespective of whether such Deposited Securities are surrendered or otherwise cancelled by operation of law, rule, regulation or otherwise, to sell by public or private sale any property received in connection with) any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all the assets of the Company.

 

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(b) To the extent the Depositary does not so amend this ADR or make a distribution to Holders to reflect any of the foregoing, or the net proceeds thereof, whatever cash, securities or property results from any of the foregoing shall constitute Deposited Securities and each ADS evidenced by this ADR shall automatically represent its pro rata interest in the Deposited Securities as then constituted.

(c) Promptly upon the occurrence of any of the aforementioned changes affecting Deposited Securities, the Company shall notify the Depositary in writing of such occurrence and as soon as practicable after receipt of such notice from the Company, may instruct the Depositary to give notice thereof, at the Company’s expense, to Holders in accordance with the provisions hereof. Upon receipt of such instruction, the Depositary shall give notice to the Holders in accordance with the terms thereof, as soon as reasonably practicable.

(14) Exoneration.

(a) The Depositary, the Company, and each of their respective directors, officers, employees, agents and affiliates and each of them shall: (i) incur no liability to Holders or Beneficial Owners (A) if any present or future law, rule, regulation, fiat, order or decree of the United States, Hong Kong, the Cayman Islands, or any other country or jurisdiction, or of any governmental or regulatory authority or any securities exchange or market or automated quotation system, the provisions of or governing any Deposited Securities, any present or future provision of the Company’s charter, any act of God, war, terrorism, nationalization, epidemic, pandemic, expropriation, currency restrictions, work stoppage, strike, civil unrest, revolutions, rebellions, explosions, computer failure or circumstance beyond its direct and immediate control shall prevent or delay, or shall cause any of them to be subject to any civil or criminal penalty in connection with, any act which the Deposit Agreement or this ADR provides shall be done or performed by it or them (including, without limitation, voting pursuant to paragraph (12) hereof), or (B) by reason of any non-performance or delay, caused as aforesaid, in the performance of any act or things which by the terms of the Deposit Agreement it is provided shall or may be done or performed or any exercise or failure to exercise any discretion given it in the Deposit Agreement or this ADR (including, without limitation, any failure to determine that any distribution or action may be lawful or reasonably practicable); (ii) assume no liability to Holders or Beneficial Owners except to perform its obligations to the extent they are specifically set forth in this ADR and the Deposit Agreement without gross negligence or willful misconduct and the Depositary shall not be a fiduciary or have any fiduciary duty to Holders or Beneficial Owners; (iii) in the case of the Depositary and its agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities, ADSs or this ADR; (iv) in the case of the Company and its agents hereunder be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities, the ADSs or this ADR, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required; and (v) not be liable to Holders or Beneficial Owners for any action or inaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, or any other person believed by it to be competent to give such advice or information, or in the case of the Depositary only, the Company. The Depositary shall not be liable for the acts or omissions made by, or the insolvency of, any securities depository, clearing agency or settlement system.

 

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(b) The Depositary. The Depositary shall not be responsible for, and shall incur no liability in connection with or arising from, the insolvency of any Custodian that is not a branch or affiliate of JPMorgan Chase Bank, N.A. The Depositary shall not have any liability for the price received in connection with any sale of securities, the timing thereof or any delay in action or omission to act nor shall it be responsible for any error or delay in action, omission to act, default or negligence on the part of the party so retained in connection with any such sale or proposed sale. Notwithstanding anything to the contrary contained in the Deposit Agreement (including the ADRs), subject to the further limitations set forth in subparagraph (q) of this paragraph (14), the Depositary shall not be responsible for, and shall incur no liability in connection with or arising from, any act or omission to act on the part of the Custodian except to the extent that any Holder has incurred liability directly as a result of the Custodian having (i) committed fraud or willful misconduct in the provision of custodial services to the Depositary or (ii) failed to use reasonable care in the provision of custodial services to the Depositary as determined in accordance with the standards prevailing in the jurisdiction in which the Custodian is located.

(c) The Depositary, its agents and the Company may rely and shall be protected in acting upon any written notice, request, direction, instruction or document believed by them to be genuine and to have been signed, presented or given by the proper party or parties.

(d) The Depositary shall be under no obligation to inform Holders or Beneficial Owners about the requirements of the laws, rules or regulations or any changes therein or thereto of any country or jurisdiction or of any governmental or regulatory authority or any securities exchange or market or automated quotation system.

 

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(e) The Depositary and its agents will not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, for the manner in which any voting instructions are given or deemed to be given in accordance with paragraph 12(b) hereof, including instructions to give a discretionary proxy to a person designated by the Company, for the manner in which any vote is cast, including, without limitation, any vote cast by a person to whom the Depositary is instructed or deemed to have been instructed to grant a discretionary proxy pursuant to paragraph (12)(b) hereof, or for the effect of any such vote.

(f) The Depositary may rely upon instructions from the Company or its counsel in respect of any approval or license required for any currency conversion, transfer or distribution.

(g) The Depositary and its agents may own and deal in any class of securities of the Company and its affiliates and in ADRs.

(h) Notwithstanding anything to the contrary set forth in the Deposit Agreement or an ADR, the Depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the Deposit Agreement, any Holder or Holders, any ADR(s) or ADS(s) or otherwise related hereto or thereto to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators.

(i) None of the Depositary, the Custodian or the Company shall be liable for the failure by any Holder or Beneficial Owner to obtain the benefits of credits or refunds of non-U.S. tax paid against such Holder’s or Beneficial Owner’s income tax liability.

(j) The Depositary is under no obligation to provide the Holders and Beneficial Owners, or any of them, with any information about the tax status of the Company.

(k) The Depositary and the Company shall not incur any liability for any tax or tax consequences that may be incurred by Holders or Beneficial Owners on account of their ownership or disposition of the ADRs or ADSs.

(l) The Depositary shall not incur any liability for the content of any information submitted to it by or on behalf of the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Securities, for the validity or worth of the Deposited Securities, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of the Deposit Agreement or for the failure or timeliness of any notice from the Company.

 

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(m) Notwithstanding anything herein or in the Deposit Agreement to the contrary, the Depositary and the Custodian(s) may use third party delivery services and providers of information regarding matters such as pricing, proxy voting, corporate actions, class action litigation and other services in connection herewith and the Deposit Agreement, and use local agents to provide services such as, but not limited to, attendance at any meetings of security holders. Although the Depositary and the Custodian will use reasonable care (and cause their agents to use reasonable care) in the selection and retention of such third party providers and local agents, they will not be responsible for any errors or omissions made by them in providing the relevant information or services.

(n) The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary.

(o) By holding an ADS or an interest therein, Holders and Beneficial Owners each irrevocably agree that any legal suit, action or proceeding against or involving the Company or the Depositary, arising out of or based upon the Deposit Agreement, the ADSs or the transactions contemplated herein, therein or hereby, may only be instituted in a state or federal court in New York, New York, and by holding an ADS or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

(p) The Company has agreed to indemnify the Depositary and its agents under certain circumstances and the Depositary has agreed to indemnify the Company under certain circumstances.

(q) Neither the Depositary, the Company nor any of their respective agents shall be liable to Holders or Beneficial Owners for any indirect, special, punitive or consequential damages (including, without limitation, legal fees and expenses) or lost profits, in each case of any form incurred by any person or entity (including, without limitation, Holders and Beneficial Owners), whether or not foreseeable and regardless of the type of action in which such a claim may be brought.

(r) No provision of the Deposit Agreement or this ADR is intended to constitute a waiver or limitation of any rights which Holders or Beneficial Owners may have under the Securities Act of 1933 or the Securities Exchange Act of 1934, to the extent applicable.

 

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(15) Resignation and Removal of Depositary; the Custodian.

(a) Resignation. The Depositary may resign as Depositary by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement.

(b) Removal. The Depositary may at any time be removed by the Company by no less than 60 days’ prior written notice of such removal, to become effective upon the later of (i) the 60th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement.

(c) The Custodian. The Depositary may appoint substitute or additional Custodians and the term “Custodian” refers to each Custodian or all Custodians as the context requires.

(16) Amendment. Subject to the last sentence of paragraph (2) (Withdrawal of Deposited Securities), the ADRs and the Deposit Agreement may be amended by the Company and the Depositary, provided that any amendment that imposes or increases any fees or charges on a per ADS basis (other than stock transfer or other taxes and other governmental charges, transfer or registration fees, SWIFT, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or that shall otherwise prejudice any substantial existing right of Holders or Beneficial Owners, shall become effective 30 days after notice of such amendment shall have been given to the Holders. Every Holder and Beneficial Owner at the time any amendment to the Deposit Agreement so becomes effective shall be deemed, by continuing to hold such ADR, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Holder of any ADR to surrender such ADR and receive the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act of 1933 or (b) the ADSs or Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to prejudice any substantial rights of Holders or Beneficial Owners. Notwithstanding the foregoing, if any governmental body or regulatory body should adopt new laws, rules or regulations which would require amendment or supplement of the Deposit Agreement or the form of ADR to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and the ADR at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance. Notice of any amendment to the Deposit Agreement or form of ADRs shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (i.e., upon retrieval from the Commission’s, the Depositary’s or the Company’s website or upon request from the Depositary).

 

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(17) Termination. The Depositary may, and shall at the written direction of the Company, terminate the Deposit Agreement and this ADR by mailing notice of such termination to the Holders at least 30 days prior to the date fixed in such notice for such termination; provided, however, if the Depositary shall have (i) resigned as Depositary hereunder, notice of such termination by the Depositary shall not be provided to Holders unless a successor depositary shall not be operating hereunder within 60 days of the date of such resignation, or (ii) been removed as Depositary hereunder, notice of such termination by the Depositary shall not be provided to Holders unless a successor depositary shall not be operating hereunder on the 60th day after the Company’s notice of removal was first provided to the Depositary. Notwithstanding anything to the contrary herein, the Depositary may terminate the Deposit Agreement without notice to the Company, but subject to giving 30 days’ notice to the Holders, under the following circumstances: (i) in the event of the Company’s bankruptcy or insolvency, (ii) if the Company effects (or will effect) a redemption of all or substantially all of the Deposited Securities, or a cash or share distribution representing a return of all or substantially all of the value of the Deposited Securities, or (iii) there occurs a merger, consolidation, sale of assets or other transaction as a result of which securities or other property are delivered in exchange for or in lieu of Deposited Securities.

After the date so fixed for termination, the Depositary and its agents will perform no further acts under the Deposit Agreement and this ADR, except to receive and hold (or sell) distributions on Deposited Securities and deliver Deposited Securities being withdrawn. As soon as practicable after the date so fixed for termination, the Depositary shall use its reasonable efforts to sell the Deposited Securities and shall thereafter (as long as it may lawfully do so) hold in an account (which may be a segregated or unsegregated account) the net proceeds of such sales, together with any other cash then held by it under the Deposit Agreement, without liability for interest, in trust for the pro rata benefit of the Holders of ADRs not theretofore surrendered. After making such sale, the Depositary shall be discharged from all obligations in respect of the Deposit Agreement and this ADR, except to account for such net proceeds and other cash. After the date so fixed for termination, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary and its agents.

 

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If the Shares are not listed or quoted for trading on a stock exchange or in a securities market as of the date so fixed for termination, then after such date fixed for termination (a) all Direct Registration ADRs shall cease to be eligible for the Direct Registration System and shall be considered ADRs issued on the ADR Register and (b) the Depositary shall use its reasonable efforts to ensure that the ADSs cease to be DTC eligible so that neither DTC nor any of its nominees shall thereafter be a Holder. At such time as the ADSs cease to be DTC eligible and/or neither DTC nor any of its nominees is a Holder, the Depositary shall (a) instruct its Custodian to deliver all Deposited Securities to the Company along with a general stock power that refers to the names set forth on the ADR Register and (b) provide the Company with a copy of the ADR Register (which copy may be sent by email or by any means permitted under the notice provisions of the Deposit Agreement). Upon receipt of such Deposited Securities and the ADR Register, the Company shall use its best efforts to issue to each Holder a Share certificate representing the Shares represented by the ADSs reflected on the ADR Register in such Holder’s name and to deliver such Share certificate to the Holder at the address set forth on the ADR Register. After providing such instruction to the Custodian and delivering a copy of the ADR Register to the Company, the Depositary and its agents will perform no further acts under the Deposit Agreement and this ADR and shall cease to have any obligations under the Deposit Agreement and/or the ADRs. After the Company receives the copy of the ADR Register and the Deposited Securities, the Company shall be discharged from all obligations under the Deposit Agreement except (i) to distribute the Shares to the Holders entitled thereto and (ii) for its obligations to the Depositary and its agents.”

Notwithstanding anything to the contrary, in connection with any termination pursuant to this paragraph (17), the Depositary may, in its sole discretion and without notice to the Company, establish an unsponsored American depositary share program (on such terms as the Depositary may determine) for the Shares and make available to Holders a means to withdraw the Shares represented by the ADSs issued under the Deposit Agreement and to direct the deposit of such Shares into such unsponsored American depositary shares program, subject, in each case, to receipt by the Depositary, at its discretion, of the fees, charges and expenses provided for in paragraph (7) hereof and the fees, charges and expenses applicable to the unsponsored American depositary share program

 

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(18) Appointment; Acknowledgements and Agreements. Each Holder and each Beneficial Owner, upon acceptance of any ADSs or ADRs (or any interest in any of them) issued in accordance with the terms and conditions of the Deposit Agreement shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and the applicable ADR(s), (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof, and (c) acknowledge and agree that (i) nothing in the Deposit Agreement or any ADR shall give rise to a partnership or joint venture among the parties thereto nor establish a fiduciary or similar relationship among such parties, (ii) the Depositary, its divisions, branches and affiliates, and their respective agents, may from time to time be in the possession of non-public information about the Company, Holders, Beneficial Owners and/or their respective affiliates, (iii) the Depositary and its divisions, branches and affiliates may at any time have multiple banking relationships with the Company, Holders, Beneficial Owners and/or the affiliates of any of them, (iv) the Depositary and its divisions, branches and affiliates may, from time to time, be engaged in transactions in which parties adverse to the Company or the Holders or Beneficial Owners may have interests, (v) nothing contained in the Deposit Agreement or any ADR(s) shall (A) preclude the Depositary or any of its divisions, branches or affiliates from engaging in such transactions or establishing or maintaining such relationships, or (B) obligate the Depositary or any of its divisions, branches or affiliates to disclose such transactions or relationships or to account for any profit made or payment received in such transactions or relationships, (vi) the Depositary shall not be deemed to have knowledge of any information held by any branch, division or affiliate of the Depositary and (vii) notice to a Holder shall be deemed, for all purposes of the Deposit Agreement and this ADR, to constitute notice to any and all Beneficial Owners of the ADSs evidenced by such Holder’s ADRs. For all purposes under the Deposit Agreement and this ADR, the Holder hereof shall be deemed to have all requisite authority to act on behalf of any and all Beneficial Owners of the ADSs evidenced by this ADR.

(19) Waiver. EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER OF, AND/OR HOLDER OF INTERESTS IN, ADSS OR ADRS) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY), INCLUDING, WITHOUT LIMITATION, ANY SUIT, ACTION OR PROCEEDING UNDER THE UNITED STATES FEDERAL SECURITIES LAWS. No provision of this Deposit Agreement or any ADR is intended to constitute a waiver or limitation of any rights which a Holder or any Beneficial Owner may have under the Securities Act of 1933 or the Securities Exchange Act of 1934, to the extent applicable.

 

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(20) Jurisdiction. Holders and Beneficial Owners understand, and by holding or owning an ADR or ADS or an interest therein such Holders and Beneficial Owners each irrevocably agrees, that any legal suit, action or proceeding against or involving the Company or the Depositary, regardless of whether such legal suit, action or proceeding also involves parties other than the Company or the Depositary, arising out of or related in any way to the Deposit Agreement, the ADSs, the ADRs or the transactions contemplated hereby or thereby or by virtue of ownership thereof, including without limitation claims under the Securities Act of 1933, may only be instituted in the United States District Court for the Southern District of New York (or, in the state courts of New York County, New York if either (i) the United States District Court for the Southern District of New York lacks jurisdiction, or (ii) the designation of the United States District Court for the Southern District of New York as the exclusive forum is, or becomes, invalid, illegal or unenforceable), and by holding or owning an ADR or ADS or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Notwithstanding the foregoing or anything in this Deposit Agreement to the contrary, subject to the federal securities law carve-out set forth in Section 20(d) below, the Depositary may refer any such suit, action or proceeding to arbitration in accordance with the provisions of the Deposit Agreement and, upon such referral, any such suit, action or proceeding instituted by Holders and/or Beneficial Owners shall be finally decided in such arbitration or proceeding instituted by Holders and/or Beneficial Owners shall be finally decided in such arbitration rather than in such court. Notwithstanding the above and anything in the Deposit Agreement to the contrary, in the Deposit Agreement, each of the parties thereto (i.e. the Company, the Depositary and all Holders and Owners) have agreed that: (i) the Depositary may, in its sole discretion, elect to institute any dispute, suit, action, controversy, claim or proceeding directly or indirectly arising out of, based upon or relating in any way to the Deposit Agreement, the ADSs, the ADRs or the transactions contemplated herein, therein, hereby or thereby, including without limitation any question regarding its or their existence, validity, interpretation, performance or termination (a “Dispute”) against any other party or parties hereto (including, without limitation, Disputes, suits, actions or proceedings brought against Holders and Owners) or any other person or party, by having the Dispute referred to and finally resolved by an arbitration conducted under the terms set out below, and (ii) the Depositary may in its sole discretion require, by written notice to the relevant person or party, or persons or parties, that any Dispute, suit, action, controversy, claim or proceeding brought by any party or parties hereto or any other person or party (including, without limitation, Disputes, suits, actions or proceedings brought by Holders and Owners) against the Depositary shall be referred to and finally settled by an arbitration conducted under the terms set out below; provided however, notwithstanding the Depositary’s written notice under this clause (ii), to the extent there are specific federal securities law violation aspects to any claims against the Company and/or the Depositary brought by any Holder, Owner or other person or party, the federal securities law violation aspects of such claims brought by a Holder or Owner or any other person or party against the Company and/or the Depositary may, at the option of such Holder, Owner, person or party, remain in the United States District Court for the Southern District of New York (or in the state courts of New York County in New York if either (i) the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute or (ii) the designation of the United States District Court for the Southern District of New York as the exclusive forum for any particular dispute is, or becomes, invalid, illegal or unenforceable) and all other aspects, claims, Disputes, legal suits, actions and/or proceedings brought by such Holder, Owner, person or party against the Company and/or the Depositary, including those brought along with, or in addition to, federal securities law violation claims, would be referred to arbitration in accordance herewith. Any such arbitration shall, at the Depositary’s election, be conducted either in New York, New York in accordance with the Commercial Arbitration Rules of the American Arbitration Association or in Hong Kong following the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL) with the Hong Kong International Arbitration Centre serving as the appointing authority, and the language of any such arbitration shall be English, all in accordance with the provisions in Section 20(d) of the Deposit Agreement. Notwithstanding the foregoing or anything in this Deposit Agreement to the contrary, any suit, action or proceeding against the Company based on the Deposit Agreement, the ADSs, the ADRs or the transactions contemplated herein, therein, hereby or thereby, may be instituted by the Depositary in any competent court in the Cayman Islands, Hong Kong, the United States and/or any other court of competent jurisdiction, or, subject to the federal securities law carve-out described in the prior sentence and set forth in Section 20(d) of the Deposit Agreement, by the Depositary through the commencement of an arbitration pursuant to Section 20(d) of this Deposit Agreement.

 

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EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Registration Statement on Form F-1 of our report dated April 9, 2021 (September 7, 2021 as to the convenience translation described in Note 3 and share split in Note 34) relating to the financial statements of TDCX Inc. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ Deloitte & Touche LLP

Singapore

September 27, 2021